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

The Latchkey Murders
July 01, 2015

The Latchkey Murders

Senior Lieutenant Pavel Matyushkin is back on the case in this prequel to the popular mystery Murder at the Dacha, in which a serial killer is on the loose in Khrushchev’s Moscow...

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.

Moscow and Muscovites
November 26, 2013

Moscow and Muscovites

Vladimir Gilyarovsky's classic portrait of the Russian capital is one of Russians’ most beloved books. Yet it has never before been translated into English. Until now! It is a spectactular verbal pastiche: conversation, from gutter gibberish to the drawing room; oratory, from illiterates to aristocrats; prose, from boilerplate to Tolstoy; poetry, from earthy humor to Pushkin. 

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.

 
Fearful Majesty
July 01, 2014

Fearful Majesty

This acclaimed biography of one of Russia’s most important and tyrannical rulers is not only a rich, readable biography, it is also surprisingly timely, revealing how many of the issues Russia faces today have their roots in Ivan’s reign.

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.

Life Stories
September 01, 2009

Life Stories

The Life Stories collection is a nice introduction to contemporary Russian fiction: many of the 19 authors featured here have won major Russian literary prizes and/or become bestsellers. These are life-affirming stories of love, family, hope, rebirth, mystery and imagination, masterfully translated by some of the best Russian-English translators working today. The selections reassert the power of Russian literature to affect readers of all cultures in profound and lasting ways. Best of all, 100% of the profits from the sale of this book are going to benefit Russian hospice—not-for-profit care for fellow human beings who are nearing the end of their own life stories.

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.

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