Russia’s currency fell to its weakest level in over a year and the central bank called an emergency meeting, signs of intensifying financial pressure on an economy weighed down by Western sanctions and the war in Ukraine.
The ruble’s decline picked up pace in recent weeks, and on Monday the currency fell past 100 to the U.S. dollar for the first time since the weeks after Russia invaded Ukraine. So far this year, the ruble has lost almost 30% of its value against the dollar. Only a handful of currencies, including the Turkish lira, Nigerian naira and Argentine peso, are having a worse year.
The ruble’s sharp fall points to mounting financial anxiety in the weeks since an aborted mutiny against the Kremlin. It has also revealed fissures among top Russian officials over how to manage the situation, with a senior Kremlin aide blaming the weak currency on a lax central bank.
“The main source of ruble depreciation and inflation acceleration is loose monetary policy,” Maxim Oreshkin, President Vladimir Putin’s top economic adviser, wrote in comments carried by Russian state newswire TASS Monday. “It is in the interests of the Russian economy to have a strong ruble,” he wrote.
The comments were an implicit dig at Russia’s central bank. It raised interest rates last month to help stamp out a nascent rise in inflation but they weren’t enough to stop the slide in the ruble. [Continue reading…]