Investing in Russian Rubles
Does the “motherland” entice you, draw you in, have you desire to invest in Russian Rubles? Under Putin and Medvedev's continuous and strong rule over the Russian Federation, they have marked a course that has stabilized the Russian economy and political situation. Investing in foreign currencies has been a timeless endeavor for those seeking to diversify their financial holding.
History of Dollar vs. Ruble Exchange Rate
Currently one US dollar (USD) is equivalent to about 28.107 Russian Rubles (RUB). There has been a bit of price changes in the history of transferring between these two currencies. Between 2004 and mid-2008, the US dollar slowly fell in comparison to the Russian Ruble. It started 2004 being equivalent to about 28.5 rubles and fell in 2008 to a nadir of 23.3 rubles. Through late 2008 and early 2009, the US dollar rose rapidly in strength against the Russian Rubles. It increased from about 23.3 rubles per dollar to a peak of over 36 rubles per dollar in February 2009. That's a 55 percent increase in an eight month span. This volatility occurred during the beginning of the housing crisis and speaks to the instability in global markets when money fled to the US dollar seeking stability.
From February 2009 to currently in July 2011, the US dollar has fallen slowly against the ruble. It now rests at about 28 Russian rubles for every US dollar.
The Russian Federation Strengths and Weakness
Investing in foreign currencies is inherently tied to the stability and potential future growth of a country's economy. A never changing aspect of Russia's geopolitics is its geographic position. It straddles both the European and Asian continents. This positioning has left Russia quite vulnerable to outside powers. On the other hand, Russia's vast space has historically given it the ability to absorb security threats. From Napoleon to Hitler no foreign threat has ever managed to capture the majority of Russia since Genghis Khan. A further problem for Russia is the diversity of peoples within its border; many of these minorities do not prefer a centralized government from the Kremlin. Many of these ethnic minorities, particularly with the ongoing tension over Chechnya have a destabilizing effect on Russia.
Russia’s vast energy reserves, which are one of the primary sources of its energy security and foreign policy, have allowed it to play political hardball with many of the nations that border it to the west. Russia has periodically shut off access to its oil and natural pipelines to European countries when they have annoyed the Kremlin.
The Security of Russia
When the former USSR collapsed in the early 1990s, it brought the economy down with it. Putin's predecessor, Boris Yeltsin oversaw anemic management of Russia's strategic assets. The military, and security apparatuses of the Russian Federation began to decay and the political situation was hectic to say the least. But, with the stability brought on by Putin and now with his partner Medvedev, the Russian ruble looks like it will be doing well in the financial market in the future.
