Why is the Russian Ruble So Strong Right Now?

2 Views

0 Likes

June 20, 2022

Video Summary

The Russian ruble has been the best-performing currency so far this year, despite the Russian economy being in a state of crisis. The government and central bank have been manipulating the currency to artificially inflate its value. Here are the five ways they’ve done it:

1. Restricting the sale of Russian assets by foreigners, making it difficult for them to get their money out of the country.
2. Limiting withdrawals of foreign currencies for Russian citizens, making it hard for them to access their money.
3. Buying their own currency with foreign reserves, artificially increasing its value.
4. Raising interest rates, making it more expensive for people to borrow money and reducing economic activity.
5. Forcing customers to buy Russian exports in rubles, increasing demand and artificially inflating the currency’s value.

The benefits of a strong currency are not being felt by the average Russian citizen, as most of the benefits are psychological and temporary. The currency’s strength is not a reflection of the economy’s strength, and the Russian economy is actually in a state of collapse. The country is facing high inflation, unemployment, and a collapsing GDP.

The author argues that the Russian government’s actions are not sustainable and will eventually lead to economic disaster. The country’s isolation from the global economy and the lack of foreign investment will make it difficult for Russia to recover.