Updated Oct 2022
Russias attack on Ukraine has led to a variety of economic sanctions being imposed on the country which has, in turn, caused the value of the Russian ruble to plummet. This makes Russian Rubles a very risky investment. If you are thinking about buying Russian Rubles, you should seriously consider the potential risks involved. This article will attempt to highlight some of the key risks and help you make an informed decision.
When I first saw the Ruble tanking as the invasion of Ukraine unfolded, I did feel a little guilty when I asked my wife; should I buy Russian rubles? My brain is hard wired to identify panic and take advantage, so when the ruble began to plummet, I had to take a look. The questions I ended up asking myself was this:
Will the west eventually lift their sanctions? And moreover, will Russias economy return to anything close to its output before they invaded?
Obviously the answer to these questions is extremely difficult. And to further complicate things, even if the sanctions are lifted and Russia’s economy does return to some semblance of normalcy, that doesn’t mean their currency will rebound. Massive corporations have ceased trading in Russia and although there is a good chance they will return when the war ends, there is no guarantee.
Russia, the West and the ruble
Russias relationship with the West is at its lowest point since the Cold War, and economic sanctions are likely to remain in place for the foreseeable future. This means that the Russian economy is likely to struggle, and the value of the ruble could continue to fall.
Perhaps the biggest risk to consider is that your Rubles (your entire investment) could be frozen or confiscated if relations between Russia and the take a further turn for the worst.
Russian president Vladimir Putin seems to enjoy threatening the west with nuclear war and many of his allies have been recorded boasting about their nuclear threat. These threats will have to be taken seriously but the underlying feeling is that Putin is flexing his muscles and not ready to esculate things to that level. But what if his threats started to get more serious? Perhaps he encroaches NATO territory to encourage a response. Or worst still, he decides to use a nuclear weapon to show he means business. It’s this type of situation that will increase the chances of Rubles being frozen.
Other factors to consider include the current high inflation rate in Russia, as well as the fact that the country is heavily reliant on oil and gas exports. If global oil prices fall, this could also have a significant impact on the Russian economy.
Russia are also currently involved in a number of military conflicts, including in Syria and Ukraine. These conflicts could escalate, leading to further economic problems for Russia and putting more downward pressure on the value of the ruble.
On the flip side, the Russian ruble could improve if relations with the West improve, or if global oil prices rise.
The main thing you need to consider if you are thinking about buying Russian Rubles is whether or not you are comfortable with the inherent risks.
Perhaps the other issue to consider is one of morality. The war in Ukraine is atrocious and Russias blinkered persistence to get what they want has caused intold amount of suffering. Childrens lives won’t be the same and indeed the children of this war are being robbed of their childhood.
Whilst I got a whiff of an opportunity to invest, ultimately my moral compass turned me away. There’s plenty of opportunity out there at the moment and even more over the next five years and I just wouldn’t feel comfortable buying rubles right now.
Should you buy the Russian ruble; FAQs to consider
How much is $1 in Russian rubles?
$1 will currently buy around 57 Russian rubles which is the lowest it’s been in over 5 years. At one point in March 2022, $1 would have bought 124 Rubles and since then, the rate has dropped considerably.
How much is £1 in Russian rubles?
£1 sterling will buy around 60 Rubles.
Is Russian currency a good investment?
This is a difficult question to answer. Obviously, there are risks involved in investing in any currency, but the Russian ruble is particularly volatile at the moment for obvious reasons. Economic sanctions, high inflation rates and military conflict are all putting downward pressure on the value of the currency. However, if global oil prices rise or relations with the West improve, the ruble could recover some of its value.
Ultimately, it’s up to you to decide whether or not you feel comfortable with the risks involved in investing in the Russian ruble. How risk averse are you? Is there room for risk in your portfolio?
Whats the best performing currency in the world at the moment?
There is no definitive answer to this as it depends on a number of factors. However, the US dollar and the Japanese Yen are both performing well at the moment. The Euro is also doing reasonably well against other currencies. You can check live currency rates here.
What will happen to the Russian ruble if Putin steps down?
It would depend on a number of factors, including who succeeds Putin and what their economic policies are. However, it’s possible that the ruble could strengthen if Putin’s successor is seen as more reform-minded. Also, their stance on the Ukraine invasion could be different and they could attempt to look for more common ground with the west (I think that’s as much as we can hope for).
Russian Ruble news today
For up to date news on the ruble and economic factors that could influence changes in exchange rate, take a look at https://www.currencynews.co.uk/
How can I buy the Russian ruble?
If you’ve considered all of the risks and you’re still interested in investing in the Russian ruble, you can do so through a foreign exchange broker. Note that you may be charged commission or fees, so compare rates before you decide on a broker. You can also buy Rubles through a bank, but they will usually only sell them to customers who are going on holiday to Russia.
https://www.torfx.com/ are worth considering. They have thousands of good reviews and an easy to use platform.