Why has the Russian ruble not collapsed yet?

Russia’s efforts to prop up the ruble appears to be working despite sanctions imposed by Western countries aimed at cutting the Kremlin’s access to external resources and crippling the nation’s ability to fund its war against Ukraine.
 
Last week, the ruble surged to a more than two-year high against the euro and the US dollar, recouping its losses during the war. The rally was triggered by Russia’s last-ditch attempt to avoid defaulting on a eurobond on Friday.
 
Russia’s finance ministry paid $564.8 million in interest on a 2022 eurobond and $84.4 million on another 2042 bond, the ministry said Friday. Both payments were made in US dollars, marking a reversal from its previous threat to pay its debts in rubles.
 
To begin this week, the ruble has continued its strong performance, with the USDRUB down almost 3%. As it stands, Rubles are exchanging hands at less than 69 per USD.



Rating cut to selective default
Prior to the payment of these bonds, Russia had earlier paid its dollar-denominated bonds in rubles, triggering a rating downgrade by S&P Global Ratings to “selective default.”
 
The rating agency said investors won’t likely be able to convert those payments into dollars equivalent to the amount due as sanctions on Russia are predicted to worsen in the coming weeks.
 
 

Gas for ruble
In a bid to bolster the ruble and retaliate against Western sanctions, Russia, one of the top oil-producing countries worldwide, required “unfriendly” buyers of the country’s natural gas to pay in rubles. While many European Union leaders were quick to reject the Kremlin’s demands, one of Germany’s biggest energy companies, Uniper, said it was ready to buy Russian gas by converting its euro payments into roubles.
 
"We consider a payment conversion compliant with sanctions law and the Russian decree to be possible," a spokesman was quoted by BBC as saying recently, adding that the absence of Russian gas “would have dramatic consequences for our economy.”
 
Russian national energy giant Gazprom recently cut off its gas supplies to Poland and Bulgaria due to their refusal to pay in rubles.
 

Commodity powerhouse
Many countries’ reliance on Russian oil and other commodities like wheat has helped the ruble avoid collapse and may play a role in supporting the currency moving forward.

 
Vyacheslav Volodin, a top Russian lawmaker, over a month ago said Russia should demand ruble payments for other commodities like wheat, fertilizer, and lumber, adding that Western governments have to pay for their decisions to sanction Russia.