2023-08-14 17:54:29
a new day in Russia and a new one ruble loss this Monday. At the time of writing this article the change is from 109 rubles for each euro, a clearly disadvantageous change, worse than usual before the Russian offensive. At the beginning of 2022 it was around 85 rubles. The only worst moment in the recent history of the country was on March 11, 2022, when the first sanctions began to be applied, such as the expulsion of Russian banks from the international system of swift cards. Throughout the last 12 months the currency has lost 40% of its value.
Although the Kremlin technocrats managed to stop the coup and even went so far as to revalue the ruble above the numbers prior to the offensive, of up to 57 rubles for each euro, this artificial growth has not translated into greater well-being for Russian citizens, who have seen how it has inflation grown and some products are in short supply, such as medicines, technological equipment, among others, something that could be worse if Moscow had not authorized parallel importation, a kind of legal smuggling through which Western products such as iPhones, Mercedes or Coca-cola arrive.
European economies have weakened Russia with international sanctions and reducing imports of Russian oil and gas to a minimum. Instead, the EU has opted to buy more hydrocarbons from the United States, Canada, Norway and Azerbaijan, among others. That hasn’t stopped the Kremlin from increasing military spending. In this 2023, it has used a third of its public spending on the Army, more than double what it spent last year, according to the Reuters news agency.
letters in the matter
Moscow knows that it must take measures and the Central Bank of Russia will hold a meeting on Tuesday board of directors meeting which will analyze “the level of the base rate”. The entity has pointed out that today there is “no threat to financial stability given the weakening of the ruble”.
Vladimir Putin’s economic adviser, Maxim Oreshkin, has told the Russian state news agency Tass that the depreciation of the currency and the growth in inflation are mainly due to a “loose monetary policy” and has called for calm because the Russian central bank has “all the necessary tools to normalize the situation in the near future”. It has admitted, however, that a weak ruble complicates “restructuring of the economy and negatively affects” the population.
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