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Shouldn't Russia sending Rubles instead of Dollars to pay USD denominated debt decrease the value of the Ruble? Additional supply -> Lower price.
by JonathanBeuys 4y ago
Shouldn't Russia sending Rubles instead of Dollars to pay USD denominated debt decrease the value of the Ruble?
Additional supply -> Lower price.
- deleted 4y ago[deleted]
- nicbou 4y agoIt creates additional demand for the rubble, since it has more users. Right?
- HWR_14 4y ago> Shouldn't Russia sending Rubles instead of Dollars to pay USD denominated debt decrease the value of the Ruble? No, because the people buying the Rubles aren't buying them on the open market. The people buying the Rubles are the people owed USD that are buying them for the rate the Russian Central Bank dictates with no choice in the matter. Plus, it provides a price floor. If I owe you $1,000,000 USD, but I can pay you 50,000,000 Rubles instead, I'm incentivized to buy Rubles up until it reaches 50 Rubles : 1 USD. > Additional supply -> Lower price. The supply isn't changing at all. The demand, whether natural or forced, is what's exploding.