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Ask HN: Why did the ruble stabilize and what's going on?

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Re: Ask HN: Why did the ruble stabilize and what's going on?

#31

Post by jupp0r »

Supply and demand.

1. Capital controls. Russians are legally not allowed to sell their Rubles anymore. This decreases supply and keeps prices up.

2. A healthy dose of foreign currency ($1B/day from Germany alone) gives the Russian central bank plenty of tools to buy Rubles and increase demand for it to keep prices up.

This does not mean that the existing sanctions aren’t working. Eventually Russian factories will run out of machine spare parts and everything will grind to a halt, people will use their jobs, demand for goods will decrease, other factories will have to close due to lack of demand for their goods, their workers get laid off - you get the idea. This takes time though.

Disclaimer: I’m not an economist, but I do have a subscription to the Economist :)

Re: Ask HN: Why did the ruble stabilize and what's going on?

#32

Post by CamperBob2 »

oblio wrote: post #30
CamperBob2 wrote: post #25

Earlier quoted context omitted.

As is usually the case when monstrous plots are afoot, the villain cheerfully told the world exactly what he was planning to do and why. He wants to recreate the Soviet Union. https://www.theguardian.com/commentisfree/2022/feb/22/putin-... Initial "peace proposals" from Russia included a rollback of NATO's military assistance to its 1997 condition, explicitly limiting the sovereignty of Poland and the Baltic states:…

> The entire gambit was to take UA quickly and then use it as a pawn to get concessions from the West How does your comment follow logically from this one? "We'll occupy Ukraine and we'll keep occupying it and we want you to give us more!" What kind of negotiation with Ukraine was that?

I never said that the plan was to use Ukraine as a pawn to get concessions from the West. That was someone else. Putin sees his conquest of Ukraine as a milestone in his own country's spiritual destiny.

Re: Ask HN: Why did the ruble stabilize and what's going on?

#33

Post by pjc50 »

roenxi wrote: post #21

The value of a currency isn't exactly decided by what it is worth to Americans. Russia still has everything they had before the war, which is still as intrinsically valuable as ever & they are still willing to trade. They haven't changed their regulatory environment in crazy ways and haven't suffered major hits to their productive capacity. In some senses, it is difficult to see why a sanctions attack against Russia…

> I'd still buy Russian products after Ukraine

Good to announce your cheerful complicity in mass murder on here so we know not to take you seriously.

Re: Ask HN: Why did the ruble stabilize and what's going on?

#35

Post by oblio »

CamperBob2 wrote: post #32
oblio wrote: post #30

Earlier quoted context omitted.

> The entire gambit was to take UA quickly and then use it as a pawn to get concessions from the West How does your comment follow logically from this one? "We'll occupy Ukraine and we'll keep occupying it and we want you to give us more!" What kind of negotiation with Ukraine was that?

I never said that the plan was to use Ukraine as a pawn to get concessions from the West. That was someone else. Putin sees his conquest of Ukraine as a milestone in his own country's spiritual destiny.

My reply was to that comment...

Re: Ask HN: Why did the ruble stabilize and what's going on?

#36

Post by rich_sasha »

trentearl wrote: post #26

It didnt stabilize, only an illusion. The government introduced strict currency controls forcing business to hold rubles. Also foreign stock holders are not allowed to sell stocks and covert to dollars. The price listed isnt real because the market isnt real, I imagine buying an iphone in Moscow right now would cost much more than the rate would lead you to believe.

Thats exactly right.

Who is buying and selling roubles? Yes, there are apparently some transactions, since there is a price, but it’s hardly a market controlled by supply-demand.

Russian exports have always been priced in USD or other foreign currencies; Russian companies don’t want to get roubles, it seems.

Similarly, with imports, companies probably need to pay in whatever non-rouble way possible, I can’t imagine any serious exporter would take roubles.

Companies receiving foreign currency are forced to exchange them immediately to roubles according to a central bank’s rate.

It’s a theatre, not a market, and so the price is mostly anything.

Re: Ask HN: Why did the ruble stabilize and what's going on?

#37

Post by Mountain_Skies »

pjc50 wrote: post #16

Russian exports have been badly dented, but some oil and gas remains. Russian imports have been completely wrecked. Effectively the sanctions have _improved_ their balance of payments. They have some money, but nobody will sell to them. Slightly different situation from their money being worthless because they're outspending their ability to earn hard currency.

>but nobody will sell to them.

The self anointed "international community" is only a very small fraction of the actual world. This is typical western hubris and arrogance thinking that everyone will blindly follow them and those who don't, will powerlessly suffer the consequences of the wrath of the west. Russia has money, the world loves money, the world will sell to Russia. Not only that, but there's no shortage of western corporations busy trying to find ways to covertly sell to Russia because that's what they've done to every other pariah state. Russia will incur higher costs to acquire the things it wants but it will still be able to get them and it will often be western companies covertly doing the selling.

Re: Ask HN: Why did the ruble stabilize and what's going on?

#38

Post by rich_sasha »

IshKebab wrote: post #27
asplake wrote: post #10

The Economist (I’m a subscriber) did a podcast on this recently. Lots of measures, but bottom line it is not a convertible currency. The published rate is a bit of a fiction.

I don't see how that can really work unless the published rate isn't the actual market rate which would be ridiculous.

Easy. Try buying and selling at this rate. It’s a hugely constrained market.

I can tell you I have an asset worth 1e12 dollars but no one can buy it or sell it. This is kind of the same.

Re: Ask HN: Why did the ruble stabilize and what's going on?

#39

Post by cassianoleal »

pjc50 wrote: post #33
roenxi wrote: post #21

The value of a currency isn't exactly decided by what it is worth to Americans. Russia still has everything they had before the war, which is still as intrinsically valuable as ever & they are still willing to trade. They haven't changed their regulatory environment in crazy ways and haven't suffered major hits to their productive capacity. In some senses, it is difficult to see why a sanctions attack against Russia…

> I'd still buy Russian products after Ukraine Good to announce your cheerful complicity in mass murder on here so we know not to take you seriously.

It's also stated here:

> I still bought US products after Iraq

Which I suspect is true for yourself as well, although I have no means to verify it.

It is true for most of the world though.

Let's look at all the other mass murders committed by the US and their allies and stop buying goods from them too, shall we?

And before the "whataboutism" flame war starts, I don't care. It's not whataboutism when you're specifically stating (implicitly or otherwise) that one is fine and the other is not.

Re: Ask HN: Why did the ruble stabilize and what's going on?

#40

Post by pjc50 »

Mountain_Skies wrote: post #37
pjc50 wrote: post #16

Russian exports have been badly dented, but some oil and gas remains. Russian imports have been completely wrecked. Effectively the sanctions have _improved_ their balance of payments. They have some money, but nobody will sell to them. Slightly different situation from their money being worthless because they're outspending their ability to earn hard currency.

>but nobody will sell to them. The self anointed "international community" is only a very small fraction of the actual world. This is typical western hubris and arrogance thinking that everyone will blindly follow them and those who don't, will powerlessly suffer the consequences of the wrath of the west. Russia has money, the world loves money, the world will sell to Russia. Not only that, but there's no shortage of…

This is unfortunately true. https://ukrainetoday.org/2022/04/23/exclusive-france-and-ger...
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