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

Jews in Service to the Tsar
October 09, 2011

Jews in Service to the Tsar

Benjamin Disraeli advised, “Read no history: nothing but biography, for that is life without theory.” With Jews in Service to the Tsar, Lev Berdnikov offers us 28 biographies spanning five centuries of Russian Jewish history, and each portrait opens a new window onto the history of Eastern Europe’s Jews, illuminating dark corners and challenging widely-held conceptions about the role of Jews in Russian history.

The Samovar Murders
November 01, 2019

The Samovar Murders

The murder of a poet is always more than a murder. When a famous writer is brutally stabbed on the campus of Moscow’s Lumumba University, the son of a recently deposed African president confesses, and the case assumes political implications that no one wants any part of.

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.

A Taste of Russia
November 01, 2012

A Taste of Russia

The definitive modern cookbook on Russian cuisine has been totally updated and redesigned in a 30th Anniversary Edition. Layering superbly researched recipes with informative essays on the dishes' rich historical and cultural context, A Taste of Russia includes over 200 recipes on everything from borshch to blini, from Salmon Coulibiac to Beef Stew with Rum, from Marinated Mushrooms to Walnut-honey Filled Pies. A Taste of Russia shows off the best that Russian cooking has to offer. Full of great quotes from Russian literature about Russian food and designed in a convenient wide format that stays open during use.

A Taste of Chekhov
December 24, 2022

A Taste of Chekhov

This compact volume is an introduction to the works of Chekhov the master storyteller, via nine stories spanning the last twenty years of his life.

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.

Russian Rules
November 16, 2011

Russian Rules

From the shores of the White Sea to Moscow and the Northern Caucasus, Russian Rules is a high-speed thriller based on actual events, terrifying possibilities, and some really stupid decisions.

93 Untranslatable Russian Words
December 01, 2008

93 Untranslatable Russian Words

Every language has concepts, ideas, words and idioms that are nearly impossible to translate into another language. This book looks at nearly 100 such Russian words and offers paths to their understanding and translation by way of examples from literature and everyday life. Difficult to translate words and concepts are introduced with dictionary definitions, then elucidated with citations from literature, speech and prose, helping the student of Russian comprehend the word/concept in context.

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.

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