Ruble tumbles as Russia's war economy comes under increasing strain
The Russian ruble has fallen to 114.75 per dollar, influenced by low oil prices, sanctions, and high government spending. The central bank suspended currency purchases to combat rising inflation.
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The Russian ruble has fallen to its lowest value in over two years, reaching 114.75 to the U.S. dollar, primarily due to a combination of low oil prices, new sanctions, and increased government spending related to the ongoing war in Ukraine. The central bank has responded by suspending currency purchases for the remainder of the year to stabilize the ruble and combat rising inflation, which is officially reported at 8.5 percent but may be higher according to private surveys. The decline in oil prices, exacerbated by weak demand from China and Europe, has further pressured the economy. Recent U.S. sanctions targeting Gazprombank and numerous Russian financial institutions have intensified these economic challenges. Critics, including prominent industrialists, have expressed concern over the central bank's high interest rates, which currently stand at 21 percent, arguing that they are not effectively curbing inflation or stabilizing the currency. The ruble has lost nearly a quarter of its value against the dollar this year, prompting calls for urgent discussions on monetary policy.
- The ruble has dropped to its lowest level since March 2022, reaching 114.75 to the dollar.
- New U.S. sanctions have targeted key Russian financial institutions, worsening economic conditions.
- The central bank has suspended currency purchases to support the ruble and combat inflation.
- Inflation is officially reported at 8.5 percent, but private estimates suggest it may be higher.
- Industrialists are criticizing the central bank's high interest rates, which are not stabilizing the economy.
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1 commentsIf it's ~15%/week, that's 1.15^52 = 143300%/year.
Other signs of Russia's decline and Putin's weakening hold on power:
- Butter is now gold [0]
- Russians wait in lines for 5+ hours for cheap eggs [1]
- Steam, water, and sewage pipes are breaking everywhere and getting worse [2]
- There are a lot of western goods still sold in Russian grocery stores because smuggling in violation of sanctions is an ineffective speed-bump [3]
- Local officials officially announced preparation for the likelihood of winter power outages by buying generators, stoves, and firewood [I can't find original sources because they are in Russian]
A government that can't pickup the garbage or keep the lights on won't stay in power for long, no matter how ignorant or ideologically-radicalized the populace has become.
0. https://www.newsweek.com/russians-resort-stealing-butter-ami...
1. https://www.newsweek.com/videos-show-massive-lines-eggs-russ...
2. https://www.ft.com/content/81985842-e20a-4f2a-96b6-69aeddbe5...
3. https://en.thebell.io/coca-cola-quit-russia-but-you-can-stil...
PS: There will be no use of nuclear weapons for many reasons. Firstly, the Russian military cannot keep a secret and there have been zero signs of mobilization for a nuclear attack. Secondly, Putin likes living not dying. Third, it would spoil his legacy. Fourth, Russia would immediately become a pariah worse than North Korea. Fifth, fallout drifts unpredictably. Sixth, conventional forces do more damage. Seventh, they are more internationally normalized than nuclear ones by being allowed to continue without a stronger, more direct response.
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