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unless they want their population to live on nothing like North Korea The exchange rate is irrelevant to people who are not importers or exporters. A ten-roubl
by simonblack 3y ago
unless they want their population to live on nothing like North Korea
The exchange rate is irrelevant to people who are not importers or exporters. A ten-rouble cabbage is always a ten-rouble cabbage within Russia. And a five-dollar coffee in the US is always a five-dollar cup of coffee, no matter what any of the external exchange rates is.
For importers a high rouble-dollar exchange is required, it makes imports cheaper in roubles.
For exporters, a low rouble-dollar exchange is required, it makes exports bring in lots and lots of roubles.
Russia is a net exporter of goods. The lower the rouble-dollar exchange rate the more roubles that Russians receive for their sales. What's not to like?
For countries like the US, who are net importers, a high exchange rate is necessary, otherwise imports would be too expensive to buy.
- VK538FY 3y agoThat's how I understand it. But that won't stop people from submitting the same subject ('rouble tanks') 10 times to Hacker News as if to prove their opinion of this conflict.
- tibbydudeza 3y agoWhite cabbage is now is 63 rub per kg (check CPI) - when you have a season of low crop yields and folks want to be paid in Dollars or Euros.
- mannerheim 3y agoThe Central Bank of Russia just raised interest rates to 12%, so evidently they do not share your assessment.
- VK538FY 3y agoNabiullina at the CBR has always been hard for me to read. (From memory: before the SMO, her policies seemed too conservative and restricted credit for SMEs.) So why did the CBR raise the guiding rate so drastically? Theories abound: a knee-jerk reaction to the RUB's depreciation compared to other major currencies or the intention to curb expected inflation due to next year's social budget. But IMHO a relatively weak RUB is clearly advantageous given the balance of trade and fiscal recettes are indeed higher.