Russia allows Ruble to devalue

Government intervention influences the ruble’s value more than the market. This past year, the Russia ruble has fallen 15% against the dollar and 12% against the Euro. Anyone who stored their wealth in rubles, lost 15% of their wealth. The Ruble’s value fell when investors withdrew money from the Russian market, which means they sold rubles and bought dollars or euros.

The ruble would have fallen more if the Bank of Russia had not intervened in the market by buying the rubles sold by investors. However, recently, the Bank of Russia has allowing the ruble to gradually fall, specifically “more than 1 percent against its target basket of dollars and euros for the fourth time in a week and the 11th time since Nov. 11.” This means the value of the ruble is not only influenced by how many are in circulation but also by how much are bought by the central bank, and is yet another reason why one should not store all their wealth in paper money.

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