One by one, Western nations are imposing sanctions on Moscow over the war in Ukraine. These countries are also threatening to paralyze Russia's economy to force a ceasefire. But Russia's currency, the ruble, is rising dramatically despite Western sanctions. The ruble rose more than 6 percent against the euro on Monday, the highest in almost seven years. Meanwhile, the ruble has appreciated against the dollar. The ruble has appreciated due to capital controls, high oil prices and delays in paying monthly taxes, Reuters said.

The ruble rose 6.3 percent against the euro at 1:36 a.m. local time on Monday. At that time 1 euro was equal to 56.75 rubles. The ruble has never appreciated so much against the euro since the beginning of June 2015. The ruble has also appreciated against the dollar. Last Friday, the value increased by 4.6 percent and was equal to 1 dollar, which was 56.46 rubles. At the end of March 2016, 1 dollar was equal to 56.06 rubles. The value of the ruble against the US dollar has never been higher. The ruble moved closer to the dollar on last Friday.

On February 24, Russian forces invaded Ukraine. In protest, US-led Western nations imposed unprecedented sanctions on Moscow. This led to a full-blown crisis in the Russian economy. But the ruble has risen about 30 percent against the dollar this year. With this, the ruble has been recognized as the best currency this year. Reuters says Russia artificially imposed some controls to protect the economy from Western sanctions. Its advantage is the rise of the ruble.

Reuters also said that the appreciation of the ruble was mainly due to export-oriented companies. Half of Russia's gold and foreign exchange reserves have been seized by Western sanctions over the war in Ukraine. But Moscow retaliated. Russia stipulates that for export, foreign currency must be converted into domestic currency ruble and then paid. This increases the demand for rubles. Due to this, with the increase in demand, its value also increases.

Analysts at Tinkoff Investment, a market analyst firm, say that the value of the Russian currency, the ruble, has risen sharply since Russia's central bank and government began imposing these conditions and restrictions.

Analysts say the exchange rate will begin to stabilize as autumn approaches. Then again the ruble will rise from 70 to 75 against 1 euro. Because, at that time, the import will return to its previous position and the restrictions that have been imposed may also be lifted.

However, analysts at the Moscow-based bank Criticism say the ruble will appreciate further against the dollar. In the next one month you can get 1 dollar with 55 rubles. However, at the end of the year it will be 60 to 70 rubles.

Analysts say there is another reason for the recent rise in the value of the ruble. That is the condition for paying the price of Russian gas in rubles. Countries that are not friends of Russia have to pay the price of gas imported from Russia in rubles under the conditions given by Moscow.

A Russian market analyst, BCS Express, said in a note that the ruble had appreciated due to foreign currency supplied by exporters, high oil prices and late payment of taxes at the end of the month. This is because the export-oriented companies convert the foreign currency in their hands into rubles to pay taxes. Then pays the liability. For this the demand for ruble increases. At the same time the value of the ruble increases.

A Russian newspaper, Vedomosti, published a report citing multiple sources. Russia's central bank has begun buying foreign currency to curb the uncontrolled rise in the ruble, it said.

Russia's central bank has denied the allegations in a statement issued Friday stating "Similar, baseless allegations concerning Russia's intelligence have been made more than once.

Analysts at Russia's Promsiviaz Bank say that if the central bank had intervened in this way, the impact on the ruble's market value would have been much clearer.

Sources:

• Reuters

• Google