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 Pet Hawk of the House of Abbas

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.  
Maria's War: A Soldier's Autobiography

Maria's War: A Soldier's Autobiography

This astonishingly gripping autobiography by the founder of the Russian Women’s Death Battallion in World War I is an eye-opening documentary of life before, during and after the Bolshevik Revolution.
A Taste of Chekhov

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.
Stargorod: A Novel in Many Voices

Stargorod: A Novel in Many Voices

Stargorod is a mid-sized provincial city that exists only in Russian metaphorical space. It has its roots in Gogol, and Ilf and Petrov, and is a place far from Moscow, but close to Russian hearts. It is a place of mystery and normality, of provincial innocence and Black Earth wisdom. Strange, inexplicable things happen in Stargorod. So do good things. And bad things. A lot like life everywhere, one might say. Only with a heavy dose of vodka, longing and mystery.
93 Untranslatable Russian Words

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.
White Magic

White Magic

The thirteen tales in this volume – all written by Russian émigrés, writers who fled their native country in the early twentieth century – contain a fair dose of magic and mysticism, of terror and the supernatural. There are Petersburg revenants, grief-stricken avengers, Lithuanian vampires, flying skeletons, murders and duels, and even a ghostly Edgar Allen Poe.
The Little Humpbacked Horse

The Little Humpbacked Horse

A beloved Russian classic about a resourceful Russian peasant, Vanya, and his miracle-working horse, who together undergo various trials, exploits and adventures at the whim of a laughable tsar, told in rich, narrative poetry.
Faith & Humor: Notes from Muscovy

Faith & Humor: Notes from Muscovy

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.
Murder at the Dacha

Murder at the Dacha

Senior Lieutenant Pavel Matyushkin has a problem. Several, actually. Not the least of them is the fact that a powerful Soviet boss has been murdered, and Matyushkin's surly commander has given him an unreasonably short time frame to close the case.
A Taste of Russia

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.

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