The year 2014 was a rollercoaster ride for the Ruble/USD forex market. The currency pair experienced extreme volatility due to various political and economic events, causing a significant impact on the Russian economy.
At the beginning of the year, the Ruble was trading at around 32.50 against the USD. However, the situation began to change in March when the conflict between Russia and Ukraine escalated. The United States and the European Union imposed several economic sanctions on Russia, which had a severe impact on the Russian economy.
The Ruble started to weaken, and by the end of the year, it was trading at around 59.00 against the USD, which was a drop of more than 80% from the beginning of the year. This was the worst performance of the Ruble against the USD in over a decade.
The sanctions on Russia had a significant effect on the country’s economy. The sanctions included restrictions on trade, finance, and investment. This led to a sharp decline in the country’s exports, which is a significant contributor to the Russian economy. The drop in oil prices also had a negative impact on the Ruble’s value, as oil is Russia’s primary export.
Furthermore, the political tension between Russia and Ukraine continued to escalate, causing further uncertainty for investors. This led to a flight of capital out of Russia, which put more pressure on the Ruble.
To counter the Ruble’s decline, the Russian central bank intervened by raising interest rates several times. However, this move had limited success, as the Ruble continued to weaken.
Despite the challenges faced by the Ruble in 2014, there were some positive developments towards the end of the year. The Russian government introduced several measures to stabilize the economy, such as a new anti-crisis program and a plan to recapitalize the banks. These measures helped to restore some confidence in the Russian economy, which led to a slight recovery in the Ruble’s value.
In conclusion, the Ruble/USD forex market had a tumultuous year in 2014. The political tension between Russia and Ukraine, economic sanctions, and the drop in oil prices led to a sharp decline in the Ruble’s value against the USD. The Russian central bank’s interventions had limited success, but the introduction of new measures towards the end of the year helped to restore some confidence in the Russian economy. The Ruble’s performance in 2014 serves as a reminder of the impact of political and economic events on forex markets.
