When ruble fell in the beginning of war, Russian Central Bank swiftly reversed the trend by mandating that all foreign currency received by exporters must be almost immediately sold at the foreign currency exchange. Soon ruble rose by more than 50%.
In about a year these restrictions were gradually relaxed and ruble slowly fell again.
Right now Russian government can reinstate these restrictions but chooses not to.
Better fill the budget from export revenue than to print money. In the former case only the consumers of imported goods are suffering, in the latter -- everybody as the result of two digit inflation.
I think central banks generally give advance notice of policy changes. The Russian one hasn't announced any policy change related to the current fall, has it?
And it hasn't changed it. The Central Bank just isn't interfering in what's happening on the foreign exchange market.
Well, it actually changed the policy a little bit a few hours ago -- it announced that it stopped buying foreign currency until the end of the year[0] to reduce the pressure on the ruble. I guess that means that it doesn't want the ruble to fall below 110 rubles per dollar.
Related:
Vladimir Putin is in a painful economic bind - https://news.ycombinator.com/item?id=42196057 - Nov 2024
Russia bans crypto mining in several regions to address electricity shortages - https://news.ycombinator.com/item?id=42185827 - Nov 2024
Russia's War Economy Is Hitting Its Limits - https://news.ycombinator.com/item?id=42152373 - Nov 2024
Russian Food Prices Skyrocket in Growing Concern for Kremlin - https://news.ycombinator.com/item?id=42139964 - Nov 2024
https://archive.ph/oNUU2
That's just wishful thinking.
When ruble fell in the beginning of war, Russian Central Bank swiftly reversed the trend by mandating that all foreign currency received by exporters must be almost immediately sold at the foreign currency exchange. Soon ruble rose by more than 50%.
In about a year these restrictions were gradually relaxed and ruble slowly fell again.
Right now Russian government can reinstate these restrictions but chooses not to.
Better fill the budget from export revenue than to print money. In the former case only the consumers of imported goods are suffering, in the latter -- everybody as the result of two digit inflation.
I think central banks generally give advance notice of policy changes. The Russian one hasn't announced any policy change related to the current fall, has it?
And it hasn't changed it. The Central Bank just isn't interfering in what's happening on the foreign exchange market.
Well, it actually changed the policy a little bit a few hours ago -- it announced that it stopped buying foreign currency until the end of the year[0] to reduce the pressure on the ruble. I guess that means that it doesn't want the ruble to fall below 110 rubles per dollar.
[0] https://www.cbr.ru/press/event/?id=23190