As it had been reported earlier, Russian MP Mikhail Matveyev has blamed labor migrants for the devaluation of the Russian ruble.  He stated on his Telegram channel that labor migrants are transferring earnings made in Russia back to their home countries, artificially driving demand for foreign currency and increasing the dollar exchange rate.  

“One of the reasons for the rise of the dollar is migrants,” Matveyev wrote on his Telegram channel.

He believes that millions of migrants in Russia are taking their earned money out of the Russian economy by sending it back to their home countries.

“Data varies, but it seems that Tajikistan’s GDP is half composed of remittances from Russia (2023 – $5.7 billion), Kyrgyzstan a third, and Uzbekistan 12-15% (its GDP is much larger, so in terms of figures this is more than $14.5 billion), and so on. There is also Georgia (over $2 billion in remittances), Armenia (over $3 billion), Kazakhstan, and others.

“In other words, migrants and their diasporas in Russia are buying tens of billions of dollars from our banks every year, artificially stimulating demand for currency and increasing its exchange rate," the Russian MP claims. 

The complete opposite

Tajik experts have called Matveyev’s statement unfounded, accusing him of being misinformed.

"Before making such baseless statements, the respected MP should have requested official statistics on remittances from the relevant Russian authorities, specifically from the Central Bank or Rosstat.  I think they would not have refused him, as the legislative body is one of the three branches of government, and executive agencies are obliged to share such data," Alisher Sodiqov, a financial sector specialist, told Asia-Plus in an interview.

He explained that more than 90% of remittances from individuals to Tajikistan, according to official statistical data, come in rubles. "This, on the contrary, contributes to the strengthening of the ruble," the expert clarified.

According to him, a reduction in the circulation of any particular currency in a country's economy leads to its strengthening in the currency market of that country, and vice versa.  “It's like with any commodity in the market – the less there is of it, the more expensive it becomes, and if there is more of it, its price will drop,” Sodiqov said.

Since 2016, banks in Tajikistan have issued remittances in rubles exclusively in the Tajik currency, converted at the exchange rate at the time of disbursement.

The rubles received by Tajik banks are mostly given to local importers for the supply of Russian goods.  In other words, the rubles that come into Tajikistan are returned to Russia, helping to sell Russian goods and products.

In the context of sanctions imposed by the West on Russia, this is of significant importance for Russian exporters and, ultimately, for Russia's economy.

Russian ruble is in trouble

Experts note that the ruble has plunged to its lowest rate against the dollar since the weeks after the outbreak of the so-called “special military operation” launched in Ukraine.  On December 4, the ruble hit 105.190 against the dollar.   

An article, which was posted on The Spectator on November 29, says the current devaluation is far from catastrophic, but it is a sign of sick economy, suffering from both the enormously costly war against Ukraine as well as economic sanctions.

The immediate trigger for the ruble’s drop this week came from the United States. On 21 November, the outgoing Biden administration sanctioned some 50 Russian banks and financial companies, including Gazprombank, which serviced payments for gas exports.

Besides, the share of the ‘unfriendly’ currencies, which includes dollars, euros, pounds and every other currency issued by Ukraine’s allies, in Russia’s revenue from exports has declined from the beginning of 2022.  As a result, there are far fewer dollars to buy, driving up the value.

Since December 2023, when the US started targeting financial institutions servicing Russian exports and imports with secondary sanctions, the cost of cross-border operations has risen constantly. This has resulted in a rise in import prices and a decline in export revenue, thus tilting the exchange balance towards a weaker ruble.

Then came a strengthening of the dollar and a decline in oil prices following Donald Trump’s presidential victory, delivering Russia fewer bucks for every export barrel, according to the article.