The Central Bank of Russia cannot stop the fall of the ruble and concern grows in Moscow

FILE PHOTO: Illustration image of US dollar and 100 Russian ruble bills (Reuters) (SHAMIL ZHUMATOV /)

He Central Bank of Russia can not stop the decline of the ruble despite the desperate measures it adopted this Tuesday, according to an article published in the newspaper The Wall Street Journal. The ruble has plunged in recent months, losing more than half its value against the dollar.. This is due to a number of factors, including the Western sanctions on Russia for his invasion of Ukrainefalling oil prices and rising inflation.

The financial entity raised interest rates from 8.5% to 12% on Tuesday, in an attempt to stop the fall of its currency. One day before, a dollar came to be worth 102 rubleswhich forced those responsible for monetary policy to call an emergency meeting, according to that newspaper from NY.

Western sanctions on Russia have been particularly devastating. for the Russian economy. The sanctions have Frozen foreign exchange reserves of Russia and have made it more difficult for the regime to negotiate with the outside world. This has led to a shortage of products and services in the countryand has caused the cost of living to rise alarmingly among the population.

The drop in oil prices it has also had a negative impact on the Russian economy. The nation led by Vladimir Putin is a large crude oil producer, and revenues account for a large part of the revenue of the Kremlinwhich also serves him to finance his bloody invasion of Ukraine. The fall in oil prices has reduced the revenue of the Russian government, and has made it more difficult for putin Solve your war.

FILE PHOTO: Elvira Nabiullina, Governor of the Central Bank of Russia, attends a session of the St. Petersburg International Economic Forum (SPIEF) in St. Petersburg, Russia, on June 16, 2022 (Reuters)
FILE PHOTO: Elvira Nabiullina, Governor of the Central Bank of Russia, attends a session of the Saint Petersburg International Economic Forum (SPIEF) in Saint Petersburg, Russia, on June 16, 2022 (Reuters) (ANTON VAGANOV /)

He rising inflation it is also having a negative impact on the country’s economy. Inflation has caused the prices of goods and services to rise, reducing the purchasing power of Russians. This has led to a decline in consumption, which has weakened the economy.

He Central Bank of Russia has taken a number of measures to try to stop the fall of the ruble, including the increase in interest rates and the sale of foreign exchange reserves. However, these measures they have not been very successful.

Rising interest rates have made it more expensive to borrow money in Russia. This has slowed down the Russian economy, but has also helped reduce inflation. However, rising interest rates have also made it more difficult for Russian companies to invest and grow.

The sale of foreign exchange reserves by the Central Bank of Russia it has helped stabilize the ruble, but it has also depleted the nation’s reserves. This money is important as it is used to finance imports and to help stabilize the ruble.

The ruble is unlikely to recover any time soon. Western sanctions on Russia they are far from over and oil prices remain low. This means that the Central Bank of Russia will have to continue to take action to try to stop the ruble from falling. However, it is difficult for these measures to be very successful. The ruble’s decline is a sign that the Russian economy is in trouble.

Here are some additional consequences of the ruble’s decline:

  • Rising cost of living for Russians.
  • Decreased purchasing power of Russians.
  • Decreased consumption.
  • Weakening of the Russian economy.
  • Increased risk of social instability.

This situation -according to The Wall Street Journal– also means that few investors will buy Russian financial assets even if they offer higher yields. The sharp rise in interest rates at the first sign of trouble may be an emblematic strategy of the president of the central bank, Elvira Nabiullinawhich many emerging countries have recently copied, but this time it may only have a moderate impact.

Pedestrians walk past the Central Bank headquarters in Moscow, Russia as the ruble continues to plunge (Reuters)
Pedestrians pass in front of the headquarters of the Central Bank in Moscow, Russia while the ruble continues to collapse (Reuters) (SHAMIL ZHUMATOV /)

The ruble will continue to depreciate in the future, reflecting the deterioration of the productive potential of Russia. Western sanctions, which have restricted imports of foreign technology, have had a negative impact on the Russian economy. Many Western companies have also left the country, further reducing economic activity.

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Source-www.infobae.com