Ruble tumbles past 100: Putin's nuclear shift stirs market
One dollar can now buy one hundred rubles. After more than a year, the Russian currency has once again crossed this symbolic threshold. "The Moscow Times" points out that this occurred after Vladimir Putin approved amendments to the nuclear doctrine, which lowered the threshold for the use of nuclear weapons.
The ruble last reached such a low level in the summer of 2023. "The Moscow Times" reports that, according to the official exchange rate set by the Bank of Russia for Wednesday, November 20, more than 100 rubles are needed for a dollar. The rate was only lower in recent years right after Russia's invasion of Ukraine began when about 150 rubles were required for the American currency.
The newspaper notes that the downward trend has persisted since Ukrainian forces struck the Kursk Oblast in early August. Over the last two years, the ruble has weakened against the dollar by 65.11 percent and from the beginning of the year to November 19 - by 10.8 percent.
"The Russian Central Bank has set official exchange rates since the Moscow Stock Exchange suspended trading in dollars and euros in June due to U.S. sanctions. The rates are based on over-the-counter transactions involving large exporters and commercial banks," the newspaper recalls.
Putin lowers nuclear weapon usage threshold
"The Moscow Times" emphasizes that the ruble's exchange rate fell after the Russian leader Vladimir Putin approved amendments to the nuclear doctrine, which lower the threshold for the use of nuclear weapons by Russia.
What's the deal? The updated Russian nuclear doctrine stipulates that the use of nuclear weapons by Moscow would be based on a "critical threat" to the sovereignty and territorial integrity of Belarus and Russia.
It also assumes that aggression directed at Russia by any country belonging to a military alliance would be considered aggression by that alliance. Furthermore, any attack on its territory conducted by a non-nuclear state with the involvement of a nuclear state will be considered a combined strike. Also, providing "territory and resources" for aggression against Russia would be grounds for applying "nuclear deterrence."
The timing of the signing of the updated doctrine does not seem coincidental, as it comes less than two days after the media reported that the U.S. allowed Ukraine to carry out long-range missile attacks in parts of Russia. Russia likely wants to show that it is responding and to increase pressure on the U.S. to reverse its decision, or at least to not further ease restrictions on missile strikes, assessed Artur Kacprzyk, a nuclear deterrence analyst at the Polish Institute of International Affairs, in a conversation with PAP.
Good and bad news for Ukraine and Russia
A weak ruble is both good and bad news for Russia. On the downside, Kremlin propagandists discussed this in August 2023. They explained that the exchange rate of the Russian currency against the American one affects the prices of goods, including those imported from China or India. The reason is simple: the dollar is also tied to currencies from these countries.
Russian media pointed out that for Russians accustomed to economic crises over the three decades since the fall of the Soviet Union, the ruble's exchange rate is of great symbolic importance as an indicator of the overall economic condition.
On the other hand, the weak ruble suits the Russian authorities, especially when the Kremlin plans larger military expenditures. And such plans are indeed underway, as Bloomberg reported in October 2024.
A weaker currency means that Russian energy exports, dictated by global oil prices counted in dollars, will increase the number of rubles in the government's coffers," explained "The Moscow Times" last year.
Thanks to this, the Kremlin can funnel even more money into an increasingly heated war economy and has more to spend on military pay. The side effects of this are visible, for example, in the rising inflation in the country.
