Russia is testing a digital ruble to try to circumvent US and European sanctions.
The planned timeline is for regular Russian people and businesses to use the central bank digital currency at their own request starting 2025, said Olga Skorobogatova, first deputy governor of the Bank of Russia in a statement.
The Bank of Russia on Thursday halted purchases of foreign currency for the remainder of the year.
Oil revenues are down as Russia has to sell oil at a discount to China and other buyers. The oil embargo means Russian oil has less demand and does not get the world price. On average, China pays $7 less per barrel for Russian crude oil than it pays for products from other countries. Western countries now have a price cap of $60 per barrel for Russian oil. Oil prices as of August 11, 2023 are about $83-89 per barrel depending on the type of oil.
Political uncertainty like the Wagner Group / Yevgeny V. Prigozhin almost coup has prompted Russian Oligarchs to move money into foreign accounts.
Russia is running a budget deficit of about 8 trillion rubles per year. There was a 3.4 trillion ruble deficit in the first 6 months. Russia is spending over $100 billion per year on its military with the Ukraine war.
In the first quarter of 2023, the Russian Finance Ministry said the deficit was due to shrinking energy revenues (-52%) and increasing expenditures (+26%), partly due to the Ukraine offensive. Russia claims its GDP shrank 1.9% in the first quarter.
Russia claims its inflation is 5-6% per year.
The collapse of the Russian Ruble by 25% since the beginning of the year means Russia’s economy in US dollar terms is less. However, Russia’s economy is dependent upon oil and gas sales which mainly trade in US dollars.
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My first thought, the Russians will hack themselves, how fitting.
Russian ruble is falling constantly in the last months. Soldiers win battles, logistics win wars. Russia will face hard times ahead. They managed to pump ruble up for short term, but in the long term wont work.
Russian military strategy has always been to cover the enemy with Russian corpses. This time Russia is way short of corpses.
Wherever the Russians go they steal indoor flush toilets and televisions because they don’t have such luxuries back home. Russians farm with horses, and fetch drinking water with a bucket.
Russia routinely exports 3 million BBL oil per day through the Black Sea. Last week Ukraine used sea drones to demilitarize a large Russian military transport vessel and an oil tanker carrying aviation fuel to Russia. Zelinski promised to sink every ship calling on Black Sea Russian ports. Black Sea shipping came to a dead stop while transportation companies searched for insurance. So far there is none to be had. With the miniscule exceptions of Vladivostok, Arctic ports, and Baltic ports all Russian trade went through the Black Sea. Russia stopped earning foreign exchange and the Ruble is collapsing. The workaround is south from Russia through the Caspian Sea and Iran. This could happen but it hasn’t yet.
The question is if this digital Ruble is programmable for the purposes of a social credit system similar to that planned in the UK and EU. Pot, kettle, black.
the fact that the ruble is going up when your whole country is a decaying corpse is ironic.
The value of the ruble is going down. Instead of taking 60 ruble to get one US dollar it takes 100 ruble. Instead of being worth as much as 2 american pennies it is worth about 1 penny.
yeah i got it backwards oops
+1 for your honesty.
I saw the chart and typed this comment too fast.
I think it is incredibly optimistic of them not to think that a new administration will be in place in Moscow by 2025, one that will quickly get sanctions lifted by repudiating everything Putin has done. And that’s assuming, of course, that the Russian Federation doesn’t actually split up into several different political entities by then.
What news do you consume? The plot shows the Ruble is strong. My best performing single stock investment was sberbank, which doubled my investment before unified moral indignation forced the market value to zero.
I agree. Even if Putin somehow loses his grip on the country (even most of the people who hate and fear him hate and fear each other more) the likelihood is strong that he will be replaced by another pro-victory, ethno-nationalistic imperialist. Even if the world is tricked into the old “promising young reformer” scam whereby a new dictator is given a “fair chance” only to prove themselves worse than he last, they will probably ask SOME questions before ending all sanctions.
The fate of the Russian Federation is something I won’t put money on. Many pundits have made strong cases both for it breaking up and for it continuing on as a united corpse. Whatever happens it probably won’t be pretty.