From Bloomberg:
Writing in a uncommon column printed by state information company Itar-Tass, President Vladimir Putin’s chief financial adviser mentioned “the supply of the weakening of the ruble and the acceleration of inflation is delicate financial coverage.” Russia wants a powerful ruble, and policymakers have the mandatory instruments to normalize the foreign money worth within the close to future, he mentioned.
Right here’re two footage of the ruble’s change fee (up is depreciation in opposition to USD), over 5 years, during the last week.
Notice that the present worth displays the CBR choice to cease buying international foreign money. A choice is imminent on the coverage fee, tomorrow 10:30am native time. The present low cost fee is 8.5%. My studying of consensus of Western economists is one thing like 10% is important by yr’s finish to stabilize the ruble (whereas then hammering the financial system; see this post for graphical interpretation of the Russian scenario in IS-LM-BP=0).
Notice that is all happening in opposition to a backdrop of intense capital controls. In that context, the deteriorating commerce steadiness take’s a driver’s function.