A major new report from the International Monetary Fund suggests that the Russians are using the currency more than they’re supposed to, and that’s not good for the world.
“It’s a big problem,” IMF Managing Director Christine Lagarde told a news conference.
“The Russians are now using the exchange rate as a way to manipulate the global economy and the global financial system.”
The report, released Tuesday, said that in the first half of 2018, Russia’s government “deployed a significant amount of its purchasing power in exchange for foreign exchange.”
The ruble fell to its lowest level since November 2014.
The rubles are widely seen as a benchmark for international prices, but the report also noted that the rubles’ appreciation has made it more expensive for foreign companies to buy the currency.
Lagarde said that while there was no direct evidence of a “rigging” operation, the use of foreign exchange for the purpose of fixing the exchange rates was “a clear violation of international law.”
Russia is one of the world’s largest trading partners, and has used the rubble as a means to make international payments since the fall of the Soviet Union.
The IMF report was released as a part of a series of efforts to bolster international trade, and it noted that China’s economy had been growing at 7.5 percent annually in 2018, the slowest rate since 2009.
Lagard acknowledged that China is “still growing at about 7 percent,” but said the country’s “economic growth is very strong, so it’s a good thing.”
The United States, which is a large trading partner, has not yet commented on the report.
“We are not going to comment on specific investigations, but we look forward to working with our partners on what further reforms can be implemented to increase transparency, and to reduce financial opacity,” U.S. Treasury Secretary Steven Mnuchin said in a statement.
The report noted that Russia has used its influence to “influence the global development of the rublev currency and to influence global financial institutions” as a “brazen attempt to circumvent domestic political and economic policies.”
The IMF also said that the country has “inadvertently and recklessly increased the rate of the exchange of rubles with its trading partners in order to influence the global exchange rate.”
The U.K. and the European Union are the two countries with the most active probes into the issue.
British Prime Minister Theresa May has said that her government will be investigating Russian influence in the currency market.