Ruble is this year’s best-performer
– Bloomberg
The Russian ruble has emerged as the world’s top-performing currency this year, outpacing even gold, Bloomberg reported on Tuesday, citing calculations based on over-the-counter market data.
The ruble has surged 38% against the US dollar, marking the strongest gains of any currency so far this year. It has also outperformed gold – long seen as a safe-haven asset – which has risen 23% to record highs since January.
Analysts cited a combination of geopolitical developments and monetary policy decisions by the Bank of Russia as key drivers of the ruble’s performance.
“Unlike many emerging-market currencies, the ruble is not facing pressure from capital outflow, caused by global investors’ retreat from riskier assets,” Sofya Donets, an economist at T-Investments, told Bloomberg, noting that capital controls “have largely shielded Russia from this.”
Other economists pointed to high borrowing costs. In October, the Bank of Russia hiked its benchmark interest rate to a record 21% to curb inflation and has held it steady since. Experts said the move dampened demand for imports, and by extension, foreign currency. Meanwhile, regulations requiring exporters to convert a portion of their foreign earnings into rubles, a measure introduced in response to Western sanctions, have further strengthened the currency, they noted.
Analysts also cited improved US-Russia relations, spurred by joint efforts to resolve the Ukraine conflict, as boosting foreign investor interest in Russian markets and the ruble. Iskander Lutsko, the head of research at Istar Capital, said international investors are increasingly turning to countries that maintain ties with Moscow to access high-yielding ruble assets. He also predicted that the conditions currently boosting the ruble are likely to persist for some time.
“There are no clear drivers for the ruble’s weakening at this stage with a rate cut off the table for the upcoming quarter,” Lutsko said.
The ruble rally comes amid a weakening of the US dollar, which hit a six-month low on Monday following tariff hikes announced by Washington. Earlier this month, US President Donald Trump introduced “reciprocal” tariffs on nearly 90 trade partners, citing unfair trade practices.
While Trump paused most of the new tariffs for 90 days, except on China, global financial markets have taken a beating as a result. Economists say the US president’s actions have shaken investor faith in US assets and cast doubt on the dollar and Treasuries as reliable safe havens. The ruble, however, has been relatively immune to the tariff war, as Russia has not been targeted.
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Now this really has to hurt!
China orders its airlines to dump Boeing
– Bloomberg
China has ordered its airlines to stop accepting Boeing jets as the trade war with the US continues to escalate, Bloomberg wrote on Tuesday, citing anonymous sources familiar with the matter.
This development follows a series of reciprocal tariff hikes between the two nations. Last week, Washington increased tariffs on Chinese imports to a total of 145%. In response, Beijing imposed 125% tariffs on American imports and restricted exports of minerals essential for high-tech manufacturing.
Beijing has also asked Chinese airlines to stop any purchases of parts or aircraft-related equipment from US companies, according to Bloomberg.
The reported order came after China’s announcement of retaliatory tariffs, which have more than doubled the cost of American aircraft and parts, making their continued use impractical for Chinese companies, Bloomberg cited its sources as saying.
In addition, the Chinese government is exploring measures to support airlines leasing Boeing jets that are now facing increased costs, the sources told the outlet.
China’s top three airlines – Air China, China Eastern Airlines and China Southern Airlines – had plans to receive 45, 53 and 81 planes from the US aerospace giant, respectively, over the next two years, according to Reuters
China is one of the biggest markets for aircraft, and has in the past accounted for up to a quarter of Boeing’s output.
US President Donald Trump seemingly slammed the decision in a Truth Social post on Tuesday. Beijing “just reneged on the big Boeing deal, saying that they will ‘not take possession’ of fully committed to aircraft,” the president wrote.
Earlier in April, Trump announced a sweeping wave of tariffs on nations with whom he claimed the US had an unfair trade deficit with. The tariffs prompted retaliation from a number of countries.
Beijing has slammed the US tariffs as “unilateral bullying.”
“China will insist on shaking hands rather than shaking fists, tearing down walls instead of building barriers, connecting instead of decoupling,” a Foreign Ministry spokesperson told a press briefing on Tuesday. It comes a day after Chinese President Xi Jinping began a set of visits to build ties with neighboring Asian countries similarly facing massive US tariffs.
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