The Russian currency briefly fell above 100 to the dollar on Tuesday, continuing its weakness amid signs that the country’s economy is facing slowing growth and rising inflation amid the war in Ukraine.
The psychological threshold of 100 to the dollar raises the prospect of weak purchasing power for Russians, who are forced to pay more for imported goods.
The ruble fell to 150 rubles to the dollar after the outbreak of war last year, before rebounding thanks to capital controls imposed by the Russian Central Bank to limit the impact of Western sanctions.
But the value of the currency has declined again in recent months, as Russia’s imports increase and its exports decline.
Russian Central Bank Governor Elvira Nabiullina warned last month that growth would slow this year and into 2024.
In August, the central bank raised its benchmark interest rate to 13% in an attempt to support the currency and fight inflation, which remains above the 4% target.
Plans announced last week for a massive increase in defense spending have also raised concerns about the government’s finances, as oil and gas revenues continue to be affected by sanctions.
President Vladimir Putin recently ordered the government and central bank to take measures to stabilize the currency, saying its weakness is the main reason for rising consumer prices.