MOSCOW (Realist English). On June 2, under the influence of reports about the EU oil embargo against Russia, the ruble fell against the euro to 63.6 rubles.
For comparison: on June 1, the single euro currency cost 62.7 rubles, and on May 31 – 64.7 rubles. As for the dollar, its exchange rate was 61.4 rubles on June 2, and 61.6 rubles on June 1. Although on May 31, the dollar cost 63.09 rubles.
On May 30, the European Union countries agreed to reduce 90% of oil imports from Russia by the end of 2022 and impose other sanctions, in particular, exclude Sberbank from the SWIFT system.
“It looks like by the end of the day, the dollar will be able to gain a foothold in the region of 60 rubles,” Sberbank CIB said in a statement.
Capital controls imposed by the authorities support the ruble, making it the most profitable currency in the world this year. In any case, this was the case until the fall of its course at the end of May. New gas payment terms for EU consumers, which require the conversion of foreign currency into rubles, also supported the national currency.
Retail sales fell in April for the first time in a year, down 9.7% year-on-year. “April was the first month in which the recession was fully reflected. Consumption has fallen significantly after the frenzied growth in March,” Sofia Donets, an economist at the Renaissance Capital, said in an interview with Bloomberg.
The hit to industry and cargo shipments was also worse than expected in April, with factory output slipping 1.6% from a year earlier. Real disposable incomes shrank 1.2% in the first quarter.
By contrast, the labor market remained stable, with unemployment even surprising with a slight downtick to 4% in April. Dozens of foreign companies pulled out of Russia in the wake of the invasion but most have kept paying workers at least temporarily.
According to the Presidential Ombudsman for the Protection of Entrepreneurs’ Rights, 86.8% of the surveyed entrepreneurs are affected by the sanctions. 77.4%, according to them, have adapted to the sanctions or hope to do so, but 11.7% have failed to do so, and are stopping business – in whole or in part.
