4 ms·

US Sanctions Hit Ruble as Russia's FX Sources Are Drying Up

6 points by 2OEH8eoCRo0 2y ago

2OEH8eoCRo0 2y ago
https://archive.ph/oNUU2 https://archive.ph/oNUU2
toomuchtodo 2y ago
Related: Vladimir Putin is in a painful economic bind - https://news.ycombinator.com/item?id=42196057 https://news.ycombinator.com/item?id=42196057 - Nov 2024 Russia bans crypto mining in several regions to address electricity shortages - https://news.ycombinator.com/item?id=42185827 https://news.ycombinator.com/item?id=42185827 - Nov 2024 Russia's War Economy Is Hitting Its Limits - https://news.ycombinator.com/item?id=42152373 https://news.ycombinator.com/item?id=42152373 - Nov 2024 Russian Food Prices Skyrocket in Growing Concern for Kremlin - https://news.ycombinator.com/item?id=42139964 https://news.ycombinator.com/item?id=42139964 - Nov 2024
protomolecule 2y ago
That's just wishful thinking. When ruble fell in the beginning of war, Russian Central Bank swiftly reversed the trend by mandating that all foreign currency received by exporters must be almost immediately sold at the foreign currency exchange. Soon ruble rose by more than 50%. In about a year these restrictions were gradually relaxed and ruble slowly fell again. Right now Russian government can reinstate these restrictions but chooses not to. Better fill the budget from export revenue than to print money. In the former case only the consumers of imported goods are suffering, in the latter -- everybody as the result of two digit inflation.
- Arnt 2y ago
  I think central banks generally give advance notice of policy changes. The Russian one hasn't announced any policy change related to the current fall, has it?
  - protomolecule 2y ago
    And it hasn't changed it. The Central Bank just isn't interfering in what's happening on the foreign exchange market. Well, it actually changed the policy a little bit a few hours ago -- it announced that it stopped buying foreign currency until the end of the year[0] to reduce the pressure on the ruble. I guess that means that it doesn't want the ruble to fall below 110 rubles per dollar. [0] https://www.cbr.ru/press/event/?id=23190 https://www.cbr.ru/press/event/?id=23190
- prmph 2y ago
  Being able to take unusual and drastic actions to prop up a currency does not mean that the economic malaise indicated by the falling currency has been fixed.
  - protomolecule 2y ago
    Not taking these actions means that the Central Bank don't think is a malaise worth fixing.
    - prmph 2y ago
      They've now taken action
      - protomolecule 2y ago
        https://news.ycombinator.com/item?id=42257593 https://news.ycombinator.com/item?id=42257593
deleted 2y ago
[deleted]

6 points by 2OEH8eoCRo0 2y ago

https://archive.ph/oNUU2 https://archive.ph/oNUU2

Related: Vladimir Putin is in a painful economic bind - https://news.ycombinator.com/item?id=42196057 https://news.ycombinator.com/item?id=42196057 - Nov 2024 Russia bans crypto mining in several regions to address electricity shortages - https://news.ycombinator.com/item?id=42185827 https://news.ycombinator.com/item?id=42185827 - Nov 2024 Russia's War Economy Is Hitting Its Limits - https://news.ycombinator.com/item?id=42152373 https://news.ycombinator.com/item?id=42152373 - Nov 2024 Russian Food Prices Skyrocket in Growing Concern for Kremlin - https://news.ycombinator.com/item?id=42139964 https://news.ycombinator.com/item?id=42139964 - Nov 2024

protomolecule 2y ago

That's just wishful thinking. When ruble fell in the beginning of war, Russian Central Bank swiftly reversed the trend by mandating that all foreign currency received by exporters must be almost immediately sold at the foreign currency exchange. Soon ruble rose by more than 50%. In about a year these restrictions were gradually relaxed and ruble slowly fell again. Right now Russian government can reinstate these restrictions but chooses not to. Better fill the budget from export revenue than to print money. In the former case only the consumers of imported goods are suffering, in the latter -- everybody as the result of two digit inflation.

Arnt 2y ago
I think central banks generally give advance notice of policy changes. The Russian one hasn't announced any policy change related to the current fall, has it?
- protomolecule 2y ago
  And it hasn't changed it. The Central Bank just isn't interfering in what's happening on the foreign exchange market. Well, it actually changed the policy a little bit a few hours ago -- it announced that it stopped buying foreign currency until the end of the year[0] to reduce the pressure on the ruble. I guess that means that it doesn't want the ruble to fall below 110 rubles per dollar. [0] https://www.cbr.ru/press/event/?id=23190 https://www.cbr.ru/press/event/?id=23190
prmph 2y ago
Being able to take unusual and drastic actions to prop up a currency does not mean that the economic malaise indicated by the falling currency has been fixed.
- protomolecule 2y ago
  Not taking these actions means that the Central Bank don't think is a malaise worth fixing.
  - prmph 2y ago
    They've now taken action
    - protomolecule 2y ago
      https://news.ycombinator.com/item?id=42257593 https://news.ycombinator.com/item?id=42257593

deleted 2y ago

[deleted]