The ruble looks strong – but it is not

DThe ruble is as strong as it was seven years ago, saying nothing about the performance of the Russian economy – even if Vladimir Putin wished it. The value of the national currency, according to the president, shows that Western sanctions are failing.

The strong ruble is mainly the result of a massive collapse of imports and an enormous budget surplus and is already making life difficult for exporters. Russia’s central bank may have managed to stop the ruble from falling after the attack on Ukraine, but it now lacks the means to return its value to levels acceptable to industry; it is also a consequence of sanctions.

Contrary to many people’s beliefs, repressive measures are already having an impact on the Russian economy. So far, this has been reflected in the small news: More and more Russians have to take out microcredit to adjust their salaries to inflation. On the other hand, most people in the country do not feel the effects of a strong ruble and high commodity prices.

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