"Who bought the dollar and euro at the bottom, who made money": The impact of the Iran conflict on exchange rates

The exchange rates of the US dollar and euro have risen in both global and Russian markets. Economist Inna Litvinenko interprets the reasons and consequences of this phenomenon.

The core reason for exchange rate fluctuations is: the escalation of the Middle East situation, leading to a significant increase in oil demand.

"Countries are rushing to purchase existing oil reserves in the shortest possible time, and these transactions must be settled in foreign currency."

Litvinenko said in a program on the Fifth Channel.

She pointed out that global trade is still settled in dollars and euros, and international transactions with Russia also use these two reserve currencies.

The second reason for exchange rate changes: the Russian federal budget aims to maximize the compensation for the deficit. Moscow currently needs stronger dollars and euros rather than rubles to maximize the revenue from oil and gas exports.

Litvinenko also commented on the gains from currency exchange:

"Whoever bought the dollar and euro at the bottom made money. Now people who want to catch the last train will find it hard to get large amounts of dollars and euros."

At the same time, she warned: exchange points and banks have tightened conditions due to exchange rate fluctuations, and the window of opportunity is narrowing day by day.

Due to the escalation of the Middle East situation, Russia and Iran are currently making a combined profit of $150 million per day. This is the positive side, but countries must be prepared to deal with further inflation that has already swept across the globe. As oil prices rise, gasoline and related logistics costs will also increase.

Thanks to Russia being an oil exporter, the Russian government can curb inflation, and the current domestic inflation level is only about 2%–3%. Litvinenko said that in addition, the growth rate of Russia's GDP in 2026 will be significantly higher than in 2025.

Original article: toutiao.com/article/7619234982506021417/

Statement: This article represents the views of the author.