NewsPutin manipulates the ruble exchange rate. Instant effects

Putin manipulates the ruble exchange rate. Instant effects

Putin manipulates the ruble exchange rate. Instant effects
Images source: © GETTY | Anadolu Agency
ed. LOS
7:03 AM EDT, October 24, 2023

The largest Russian exporters, in accordance with Vladimir Putin's decree, must sell a portion of their profits in foreign currency. The Russian President made this decision to rescue the ruble's exchange rate. The first effects are visible - the last time it was this strong against the dollar was in August of this year.

Since August, the Kremlin and the Bank of Russia have been trying to save the ruble exchange rate and, relatedly, control rising inflation in the country. According to forecasts, the cost of living there will be around 7 percent at the end of the year, compared to the inflation target of 4 percent. The weak condition of the Russian currency has especially raised the prices of imported products.

The Bank of Russia, seeing the equivalence of the ruble and the cent in August, decided to drastically raise interest rates. This briefly helped the Russian currency. In October, President Vladimir Putin came to the rescue, ordering the largest exporters to sell part of their profits in foreign currency.

Effects? The US dollar rate on Monday (October 23) fell to 94 rubles. According to analysts cited by the newspaper "Kommersant", this is exactly the effect of Putin's decree. It is emphasized - as the Russian dictator promised - that the new regulations have deterred speculators.

Vladimir Putin denied his propaganda

Initially, the Kremlin's propaganda tried to convince Russian citizens that the expensive American dollar should not worry them, because after all they pay with rubles in shops. However, experts quickly debunked this view, explaining that goods purchased from abroad are more expensive.

Putin himself recently admitted, when asked by journalists about the aforementioned decree, that the Russian budget needs a "slightly lower" dollar rate.

A special decree, the content of which will not be made public, pertains to 43 groups of companies belonging to the fuel-energy complex, iron and non-ferrous metallurgy, chemical and forestry industry, and grain farming.

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