July 11, 2023

How Low Can it Go?


How Low Can it Go?

As financial observer Barbara Kollmeyer noted, "The Russian ruble is fishing for a bottom, but doesn't look to find it anytime soon."

The ruble fell 3.9% last week and 23% in the year to date, making it one of the world's worst performing currencies, just above the Turkish lira.

At the date of this writing, $1 equaled 91.2 rubles.

The immediate cause is the Prigozhin Mutiny, which contributed to half of the recent decline, complicated by underlying complexities that continue to pummel the Russian economy, namely:

  1. a costly war of aggression against its Ukrainian neighbor
  2. additional tightening of Western economic sanctions
  3. continued decline in sales of oil and gas (see 2)
  4. falling global oil prices

The ruble exchange rate has now moved out of the "comfort zone" (80-90 rubles per dollar) previously signaled by Deputy Prime Minister Andrei Belousov, and it is not clear how much effort the government will undertake to stem a continued decline.

Since the war began, the ruble has not been a free-floating currency, but has an exchange rate set falsely by agreement between major export companies and the Finance Ministry.

With little prospect of increased foreign trade or earnings, the government will need to cut spending or raise taxes if it wants to prop up the ruble. Some analysts are predicting positive effects from a Central Bank interest rate hike on July 21, while others warn that at this point it would not take much to spook the public and start a run on ATMs.

Economist Konstantin Sonin does not see a pretty picture ahead: "What remains is continuing capital flight, decreasing budget revenues, both oil/gas and domestic taxes, declining real incomes, CB [central bank] reserves lost because of the war – so the ruble doesn't have anywhere to go but down. Not necessarily as fast as in the last couple of months, though," he said.

You Might Also Like

Rolling in Rubles
  • July 07, 2023

Rolling in Rubles

St. Petersburg introduces a resort fee for tourists, with penalties for non-payment.
Facts and Figures
  • May 29, 2023

Facts and Figures

Another statistical look at the impact of Russia's War on Ukraine.
Ruble Rabble: The Kremlin's Grand Strategy
  • December 17, 2014

Ruble Rabble: The Kremlin's Grand Strategy

World oil prices are plummeting, the ruble is in free fall, the Russian economy is on the brink of a recession, inflation is climbing, and the Russian Central Bank’s benchmark interest rate has jumped to 17 percent. Meanwhile, President Putin still has popularity ratings in the 80 percent range and there is, seemingly, no panic in the streets of Moscow. What is going on? What is Putin’s game? 
Like this post? Get a weekly email digest + member-only deals

Some of our Books

Bears in the Caviar
May 01, 2015

Bears in the Caviar

Bears in the Caviar is a hilarious and insightful memoir by a diplomat who was “present at the creation” of US-Soviet relations. Charles Thayer headed off to Russia in 1933, calculating that if he could just learn Russian and be on the spot when the US and USSR established relations, he could make himself indispensable and start a career in the foreign service. Remarkably, he pulled it of.

How Russia Got That Way
September 20, 2025

How Russia Got That Way

A fast-paced crash course in Russian history, from Norsemen to Navalny, that explores the ways the Kremlin uses history to achieve its ends.

Fish
February 01, 2010

Fish

This mesmerizing novel from one of Russia’s most important modern authors traces the life journey of a selfless Russian everywoman. In the wake of the Soviet breakup, inexorable forces drag Vera across the breadth of the Russian empire. Facing a relentless onslaught of human and social trials, she swims against the current of life, countering adversity and pain with compassion and hope, in many ways personifying Mother Russia’s torment and resilience amid the Soviet disintegration.

The Pet Hawk of the House of Abbas
October 01, 2013

The Pet Hawk of the House of Abbas

This exciting new trilogy by a Russian author – who has been compared to Orhan Pamuk and Umberto Eco – vividly recreates a lost world, yet its passions and characters are entirely relevant to the present day. Full of mystery, memorable characters, and non-stop adventure, The Pet Hawk of the House of Abbas is a must read for lovers of historical fiction and international thrillers.

 
Murder and the Muse
December 12, 2016

Murder and the Muse

KGB Chief Andropov has tapped Matyushkin to solve a brazen jewel heist from Picasso’s wife at the posh Metropole Hotel. But when the case bleeds over into murder, machinations, and international intrigue, not everyone is eager to see where the clues might lead.

Steppe
July 15, 2022

Steppe

This is the work that made Chekhov, launching his career as a writer and playwright of national and international renown. Retranslated and updated, this new bilingual edition is a super way to improve your Russian.

Faith & Humor
December 01, 2011

Faith & Humor

A book that dares to explore the humanity of priests and pilgrims, saints and sinners, Faith & Humor has been both a runaway bestseller in Russia and the focus of heated controversy – as often happens when a thoughtful writer takes on sacred cows. The stories, aphorisms, anecdotes, dialogues and adventures in this volume comprise an encyclopedia of modern Russian Orthodoxy, and thereby of Russian life.

The Moscow Eccentric
December 01, 2016

The Moscow Eccentric

Advance reviewers are calling this new translation "a coup" and "a remarkable achievement." This rediscovered gem of a novel by one of Russia's finest writers explores some of the thorniest issues of the early twentieth century.

About Us

Russian Life is a publication of a 30-year-young, award-winning publishing house that creates a bimonthly magazine, books, maps, and other products for Russophiles the world over.

Latest Posts

Our Contacts

Russian Life
73 Main Street, Suite 402
Montpelier VT 05602

802-223-4955