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

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

#1
Today the Ruble is worth more than 2 months ago before the Russian invasion of Ukraine. Can any economists chime in and explain why this is happening? Inflation in Russia looks to be high but similar to the one in Lithuania for example. Ukraine inflation is lower which in my dilettante view doesn't make sense.

It looks like it's business as usual and war doesn't really have any impact on global economy at the moment. Prices were going up before Feb anyway.

So what's going on?

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

#3
Not an economist, but my understanding is that they propped up the ruble by requiring it to be used for transactions that could previously have settled in other currencies, and by forbidding certain foreign currency purchases. If you can't buy dollars, it doesn't matter what the exchange rate is.

Obviously that won't work, long term.

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

#4
Dead Cat Bounce brought to you by lots and lots of spending/maneuvering. Not sustainable. In about 2-3 months, Russia is fucked and will be forced to move to a new economic model apart from the world. The entire gambit was to take UA quickly and then use it as a pawn to get concessions from the West

Now they are finding themselves fighting a nation with a direct IV line from the US defense budget (similar to Israel) and that's not a winning position to be in given that the US alone is 10x defense spend - not even counting UK, the baltic states, etc.

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

#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.

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

#6
Interest rate increases, selling reserves, RUB sales bans, demanding customers pay for energy in RUB, demanding local businesses sell non-RUB reserves, banning foreign sales of Russian assets

The rate may look similar, but it is against a backdrop of a significantly different and far worse economic environment, not least the use of reserves to prop the currency will have depleted their reserves.

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

#9
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.
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