The Russian ruble plummeted to 100 against the USD on Monday, August 14, 2023, for the first time since March 2022. This is a significant drop in value, and it is a sign that Russia is still grappling with economic difficulties due to the conflict in Ukraine.This historic event has been reported by several news outlets. According to MSN, the Russian Ruble slid past 100 to the U.S. dollar on Monday, nearing a 17-month low. President Vladimir Putin’s economic advisor blamed loose monetary policy for the rapid depreciation.
Factors:
There are a number of factors that have contributed to the decline of the Russian Ruble against its rival USD .
01. Sanctions Imposed by West on Russia due to the war have, hindered the country’s export of goods and services. The Ruble has experienced a decrease in demand, resulting in higher costs for Russians to import goods and services.
02. The ongoing war has resulted in a decrease in the level of trust investors have in Russia. As a result, there has been a significant sell-off of Russian assets, which has further contributed to the depreciation of the ruble..
03.Tthe Russian central bank has been forced to intervene in the currency market to prop up the ruble. This has depleted the Central Bank’s reserves, and it has made it more difficult for the bank to control the value of the declining currency.
Impact of Decline on Economy:
The decline of the ruble is having a significant impact on the Russian economy. Inflation is rising, and there is a shortage of goods and services. This is making it difficult for Russians to make ends meet, and it is creating social unrest.
The long-term impact of the decline of the ruble is uncertain. It is possible that the ruble will continue to fall, and it is also possible that it will stabilize. However, it is clear that the war in Ukraine is having a devastating impact on the Russian economy, and the decline of the ruble is just one of the many challenges that Russia is facing.
References:
- Russian ruble plummets to 100 against dollar for first time since March: https://www.bloomberg.com/news/articles/2023-08-14/ruble-crashes-through-100-per-dollar-despite-central-bank-s-move
- Why is Russia’s ruble dropping in value?: https://theworld.org/stories/2023-07-14/why-russia-s-ruble-dropping-value
- Ruble Hits Early War Lows Following Prigozhin’s Mutiny: https://www.nytimes.com/2023/07/06/world/europe/ruble-prigozhin-mutiny-russia-economy.html
