<p>Any foreign central bank can influence the dollar, but the extent of this influence depends on the amount of dollar reserves it intends to sell or buy.</p>
<p>Any country's central bank can start selling its USD reserves, trying to weaken the dollar. However, dollar demand is so strong worldwide, that the amount of reserves being sold would have to be unrealistically high to have any meaningful impact on the strength of the dollar in the world economy.</p>
<p>Assuming USD demand is constant, no individual CB has enough reserves to meaningfully depreciate the US dollar.</p>

CC BY-SA 4.0
2024-05-29T10:36:15.860Z
I remember that day when 1USD was equal to 80 RUB, the next day 1USD was equal to 68 RUB. But I'm not sure that it were CB influences. How is it possible?
Mike_bb
CC BY-SA 4.0
2024-05-30T02:29:07.393Z
If you're referring to strengthening RUB, that could be attributed to Russia's gas sales in rubles. All foreign energy buyers must convert their USD into RUB before the purchase. This increases demand for RUB, strengthening the exchange rate. Take a look at the FX rate starting in March 2022 when this decree was announced: you can see how quickly this massive demand for RUB strengthened the exchange rate.
A. Shultz
CC BY-SA 4.0
2024-05-30T06:53:13.937Z
Is it true that if RUB is strengthened then USD is depreciated? @A. Shultz
Mike_bb
CC BY-SA 4.0
2024-05-31T02:33:42.033Z
@Mike_bb if RUB strengthens, then USD depreciates relative to the RUB, yes. But RUB is a pretty niche currency to begin with, so it did not impact the strength of the USD relative to other currencies.
A. Shultz
CC BY-SA 4.0
2024-05-31T09:32:36.943Z
Thx. How to know that some currency is niche currency? @A.Shultz
Mike_bb
CC BY-SA 4.0
2024-05-31T15:00:46.787Z
By the amount of international trade done in that currency and gdp of countries using that currency.
A. Shultz
CC BY-SA 4.0
2024-05-31T16:53:21.280Z
I understand that amount of international trade done in that currency matters. But I don't understand how does gdp of countries matter? @A.Shultz
Mike_bb
CC BY-SA 4.0
2024-06-13T05:32:05.410Z
@A.Shultz Hi. Can you elaborate about GDP?
Mike_bb
CC BY-SA 4.0
2024-06-17T05:23:04.233Z
@Mike_bb gdp growth increases demand for currency domestically (need to facilitate more transactions) and internationally (investment inflows from abroad, chasing growth)
A. Shultz
CC BY-SA 4.0
2024-06-17T05:28:57.047Z
@A.Shultz Big thanks!
Mike_bb
CC BY-SA 4.0
2024-06-17T10:17:08.000Z
@A.Shultz What transaction do you mean? And how demand for currency domestically influence to exchange rate? Thanks.
Mike_bb
CC BY-SA 4.0
2024-06-17T18:59:15.787Z
@Mike_bb all transactions in the domestic economy (look up aggregate demand). If there's high demand for currency domestically it'll appreciate in value, so there's no incentive to buy foreign currencies, that'll only reduce your purchasing power.
A. Shultz
CC BY-SA 4.0
2024-05-28T21:44:25.207Z
2024-05-28T23:43:25.123Z
2024-05-28T23:43:25.123Z
A. Shultz
<p>I read in Russian article that Russian CB can't influence on dollar. CB can't depreciate dollar. CB can influence on rate of RUB only. But if there is demand on USD or RUB then why can't CB influence on USD?</p>
<p>Why can't Russian CB influence on dollar?</p>
<p>Thanks.</p>

<macroeconomics><monetary-policy><money><exchange-rates>
Why can't Russian CB influence on dollar?
Mike_bb
# Why can't Russian CB influence on dollar?

(Asked by: username_0 on 2024-05-24)

I read in Russian article that Russian CB can't influence on dollar. CB can't depreciate dollar. CB can influence on rate of RUB only. But if there is demand on USD or RUB then why can't CB influence on USD?

Why can't Russian CB influence on dollar?

Thanks.

**Tags:** macroeconomics, monetary-policy, money, exchange-rates

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## 1 answers

### Answer by username_1 on 2024-05-28. Score: 1 | Accepted answer

Any foreign central bank can influence the dollar, but the extent of this influence depends on the amount of dollar reserves it intends to sell or buy.

Any country's central bank can start selling its USD reserves, trying to weaken the dollar. However, dollar demand is so strong worldwide, that the amount of reserves being sold would have to be unrealistically high to have any meaningful impact on the strength of the dollar in the world economy.

Assuming USD demand is constant, no individual CB has enough reserves to meaningfully depreciate the US dollar.

> **Comments:**
> **username_0**: I remember that day when 1USD was equal to 80 RUB, the next day 1USD was equal to 68 RUB. But I'm not sure that it were CB influences. How is it possible?  
> **username_1**: If you're referring to strengthening RUB, that could be attributed to Russia's gas sales in rubles. All foreign energy buyers must convert their USD into RUB before the purchase. This increases demand for RUB, strengthening the exchange rate. Take a look at the FX rate starting in March 2022 when this decree was announced: you can see how quickly this massive demand for RUB strengthened the exchange rate.  
> **username_0**: Is it true that if RUB is strengthened then USD is depreciated? @A. Shultz  
> **username_1**: @Mike_bb if RUB strengthens, then USD depreciates relative to the RUB, yes. But RUB is a pretty niche currency to begin with, so it did not impact the strength of the USD relative to other currencies.  
> **username_0**: Thx. How to know that some currency is niche currency? @A.Shultz  
> **username_1**: By the amount of international trade done in that currency and gdp of countries using that currency.  
> **username_0**: I understand that amount of international trade done in that currency matters. But I don't understand how does gdp of countries matter? @A.Shultz  
> **username_0**: @A.Shultz Hi. Can you elaborate about GDP?  
> **username_1**: @Mike_bb gdp growth increases demand for currency domestically (need to facilitate more transactions) and internationally (investment inflows from abroad, chasing growth)  
> **username_0**: @A.Shultz Big thanks!  
> **username_0**: @A.Shultz What transaction do you mean? And how demand for currency domestically influence to exchange rate? Thanks.  
> **username_1**: @Mike_bb all transactions in the domestic economy (look up aggregate demand). If there's high demand for currency domestically it'll appreciate in value, so there's no incentive to buy foreign currencies, that'll only reduce your purchasing power.  

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