- A mass fleeing of Russian citizens into neighboring countries has sent their native currencies soaring.
- Armenia, Georgia, and Tajikistan in Central Asia are among the world’s top performers against the dollar.
- The Armenian dram has gained 22% in 2022 and is the top global currency.
Russian citizens fleeing the country to avoid being pulled into the war in Ukraine have helped the currencies of neighboring countries soar against the US dollar.
Armenia, Georgia, and Tajikistan are some of the best performers this year against the greenback, with the Armenian dram in particular gaining 22% to make it the world’s top gainer, according to data compiled by Bloomberg. Thousands of Russians have scattered and settled throughout the former Soviet republics, bringing with them billions in savings.
Meanwhile the Georgian lari and the Tajik somoni gained 16% and 10% respectively. All three currencies have outperformed the Russian ruble. Kazakhstan has seen its population explode by 19 million, yet its native currency has declined by over 7% this year against the dollar.
A large portion of the currency growth is due to money transfers, specifically from non-commercial transfers from out-of-country workers, with the equivalent of $1.75 billion entering Georgia from Russia, according to Bloomberg. Armenia saw a $2.8 billion inflow in the first 10 months of the year.
The currency appreciation in countries surrounding Russia is a stark reversal of expectations. Neighbors foresaw severe economic turmoil in response to Russia’s invasion of Ukraine, as the Kremlin served as their biggest trading partner and was expected to face extreme headwinds from western sanctions.