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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?

#41

Post by Mountain_Skies »

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.

You never buy anything from China?

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

#43

Post by secondcoming »

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.

Where was the device you typed this message on made?

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

#44

Post by marbu »

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.

This seems to be going towards the system which soviet union used. The official rate is an illusion created by the government while actual market exchange is basically illegal:

The Soviet Union officially valued the ruble in the planned economy at an average of 0.74 руб per USD ... However, as the ruble was not internationally exchangeable and as Soviet citizens could not legally own foreign currency, rubles changed hands in the black market at an average of 4.14 руб per dollar in the same period

https://en.wikipedia.org/wiki/Soviet_ruble#Exchange_rates

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

#45

Post by kalmi10 »

Aeolun wrote: post #9
kalmi10 wrote: post #5

I remember hearing on France 24 (from Anastasiya Shapochkina iirc) when the sanctions were just being introduced that the sanctions would effectively make it cheaper for Russia to finance the war as most their monetary assets are in foreign currencies while most of their expenses are in rubel.

The big problem being that they can’t actually access most of those foreign assets now.

The way she put it led me to believe that there were significant non-rubel monetary assets inside the country, which I could totally believe to be true.

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

#46

Post by gregwebs »

H8crilA wrote: post #29

20% interest rates. Yes, just raising rates to a high enough level is enough. This is macroeconomic policy 101. It will seriously deflate the Russian economy, recent World Bank projections are for a -11% GDP drop (Ukraine: -40% drop). That's a very severe recession. You can always defend a currency at the expense of jobs, it was done in the US too, by Paul Volcker.

Even with this internet rate they are experiencing elevated inflation. The ruble may be stable, but these conditions of high interest and capital controls are expected to severely damage the economy if they are maintained.

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

#47

Post by logifail »

> "One of the most frequent lines heard in Washington is that Russia is now globally isolated — with China being the key prevaricator. America risks being seduced by its own public relations. The world’s reaction to Russia’s invasion of Ukraine is far more complex than that. Since February 24, the west has been galvanised into showing more unity than it has in years. Yet most of the world is on the sidelines waiting to see which way it goes. Not for the first time, the west is mistaking its own unity for a global consensus" [0]

[0] https://www.ft.com/content/d7baedc7-c3b2-4fa4-b8fc-6a634bea7...

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

#48

Post by notahacker »

jupp0r wrote: post #31

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…

They also had existing foreign currency reserves (far more than the foreign currency still flowing into the country) to sell for rubles to prop up the currency (easier to to force up the price for rubles when most people arent allowed to sell theirs)

They're expected to run out of accessible foreign currency reserves soon if they continue at this rate though, and the head of the Russian Central Bank tasked with actually making the trades is not optimistic about Russia's economic outlook for this quarter...

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