Can someone explain the graph above to me? I understand why the value of the ruble crashed after Russia invaded Ukraine. What I don’t understand is why it has recovered. Now it’s only about 15% less than it was before the invasion.
Can someone explain the graph above to me? I understand why the value of the ruble crashed after Russia invaded Ukraine. What I don’t understand is why it has recovered. Now it’s only about 15% less than it was before the invasion.
My guess is that sanctions against Russia reduced the number of international transactions that involve the ruble. And then Russia imposed capital controls to set the rate (prohibiting Russian banks from selling Rubles, requiring Russians to exchange foreign currency at stated rates).
How Russia’s Central Bank Engineered the Ruble’s Rebound (WSJ):
https://www.wsj.com/articles/how-russias-central-bank-engineered-the-rubles-rebound-11648458200?mod=business_trending_now_article_pos5
Also, the so-called sanctions are very porous, and important exports like oil and gas are excluded from the sanctions.
So many sanctions have been put on Russia and Russians in the past that the law of diminishing returns set in some time ago. Also, the move to de-dollarize the world economy is gaining steam, and substantial de-dollarization (but not total) is going to happen. This will prove to be a major problem for the US economy, especially federal budgets.
Also the hopes about the talks. Nice WSJ article. Wonder how long they can keep it up?
Steve
Thank you. That’s the information I was looking for.
Bottom line: declaring victory on the economic front is premature. We just don’t know yet. More “fog of war”.