US Sanctions Hit Ruble as Russia's FX Sources Are Drying Up | Hacker News Reader

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

bloomberg.com

6 points2OEH8eoCRo09 comments

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.

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.

Not taking these actions means that the Central Bank don't think is a malaise worth fixing.

They've now taken action

https://news.ycombinator.com/item?id=42257593

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?

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

Vladimir Putin is in a painful economic bind - 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 - Nov 2024

Russia's War Economy Is Hitting Its Limits - 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 - Nov 2024

Reply on news.ycombinator.com