The exchange rate is an important economic indicator both in the study of a single country’s economy and in the research of economic relations between two states. According to Chen (2020), an exchange rate is “the value of one nation’s currency versus the currency of another nation…” (para. 1). Here will be discussed how the exchange rate of the ruble, which is the Russian Federation’s currency, affects the economic climate of the United States (US) and vice versa.
US dollar to Russian ruble graph shows that the ruble has experienced significant and small peaks and valleys over the past year. In general, it can be said that the Russian currency has fallen in value in relation to the US Dollar by about ten rubles by February 2021 (US dollar to Russian ruble graph converter, 2021). During 2020, it became cheaper several times, but by the end of the year, the ruble could regain some value and adapt to the economic realities created by the COVID-19 pandemic. It means goods and products that use Russian inputs, which Russia imports to the United States, will cost its residents a little less than in 2019 and about the same as in 2020.
Here the question arises as to what the Russian Federation is importing into the US. According to Central Intelligence Agency (CIA, 2021), Russia’s major exports are “petroleum and petroleum products, natural gas, metals, wood and wood products, chemicals” (para. 75). Therefore, imported Russian-made products that consist of these materials will become slightly cheaper. Moreover, one should also expect that the same domestic products might also become marginally less expensive due to market competition. It follows logically that US-made goods exported to Russia would become more expensive for its citizens.
References
Central Intelligence Agency. (2021). Economy. The World Factbook.
Chen, J. (2020). Exchange Rate Definition. Investopedia.
US dollar to Russian ruble graph converter. (2021). X-Rates.