Putin's plan to prop up the ruble is working. For now

[dalton99a]

https://www.cnn.com/2022/03/31/investing/russia-ruble-putin/index.html

Putin's plan to prop up the ruble is working. For now
By Charles Riley, CNN Business
Updated 7:53 AM ET, Thu March 31, 2022

...

What has Moscow done to boost the ruble?
- The central bank has more than doubled interest rates to 20%. That encourages Russian savers to keep their money in local currency.
- Exporters have been ordered to swap 80% of their foreign currency revenues for rubles rather than holding onto US dollars or euros.
- Russian brokers have been banned from selling securities held by foreigners.
- Residents are not allowed to make bank transfers outside Russia.
- Russia has threatened to demand payment for natural gas in rubles, not euros or dollars.

These measures have allowed Moscow to artificially manufacture demand for the ruble. The problem facing policymakers is that with Russia's economy in tatters, nobody actually wants to buy the currency of their own accord. When the restrictions are lifted, demand for the ruble will drop, and its value will slide — perhaps dramatically.

The same is true for Russia's stock market. The benchmark MOEX index trended higher when trading resumed a week ago after a long stoppage forced by the war, but analysts say that's due to restrictions in place on investors, including a ban on short selling. Only 33 stocks were allowed to trade when the market reopened. When trading was extended to all stocks this week, the index fell again.

With that in mind, the rebound of the ruble and stock market moves shouldn't be taken as a signal that Russia's economy is on the mend. The country is facing its deepest recession since the 1990s, and the economy will shrink by a fifth this year, according to a recent forecast from S&P Global Market Intelligence.

-------------------------------------------------------------------------------------------------------------------

https://www.wsj.com/articles/russia-set-for-steep-slump-and-long-stagnation-in-wake-of-ukraine-war-11648702801

Russia Set for Steep Slump and Long Stagnation in Wake of Ukraine War
An analysis by a top regional development bank sees Ukraine’s economy shrinking more but rebounding sharply next year
By Paul Hannon
Updated March 31, 2022 8:50 am ET

Russia’s invasion of Ukraine will cause their economies to contract this year by about 10% and 20%, respectively, the region’s leading development bank said Thursday in one of the most in-depth economic assessments to date of the war’s impact on the two countries.

The European Bank for Reconstruction and Development said the slump in Russia would likely turn into a long period of stagnation while neighboring economies would rebound next year as long as a sustainable cease-fire is secured over the coming months.

While Ukraine will suffer more in the short term because of the extensive damage to its physical infrastructure, Russia faces more long-term challenges from an exodus of well-educated workers and the loss of access to Western technologies under current sanctions, the bank said.

The EBRD economist said that drag on growth would likely persist even if sanctions were lifted as part of a peace agreement.

“This effect, I would expect it to linger way beyond sanctions, if there’s no regime change,” she said.

[Alexander Of Assyria]

1. War is NOT good for any economy! Don't let the Rich propagandize/monetize war!

War? What is it good for? Absolutely nothing… But for enriching the war factory owners and the politicians they corrupt, payment in cash, debt in blood.

$840 Billion a year spending in America, and ever rising, on Death, is why there is little left for Life.

An abomination.

[Chainfire]

2. But we love it so much.

Even if it is good only for the undertaker.

[bif]

3. What is it up to, three cents?

[ck4829]

4. We need stronger sanctions and no going "back to normal" unless the Kremlin is demolished