Many so-called "experts" claimed that sanctions were ineffective, citing the fact that the Russian ruble had been artificially lowered to 50 rubles per dollar (as if this were a positive outcome).
However, in reality, when a country is heavily sanctioned and isolated from the rest of the world, its imports decrease significantly while oil exports remain constant. Additionally, due to the ongoing conflict, oil prices rose, creating the false impression that a higher level of foreign reserves (exports minus imports) was sustainable and beneficial. In actuality, the gains from X-M were unsustainable, and would eventually lead to economic collapse. Essentially, Russia sacrificed its entire economy for the short-term appearance of a strengthened ruble.
I pointed this out to many "experts" back then but they were either too ignorant to understand it or too worried about the click bait to care. Today we all see the reality of RUB to USD 80 to 1. a 55% appreciation. While this is not important since almost no one traded RUBUSD it is important in better understanding FX and not being fooled by those who call themselves "Experts" or those who wish to push Russian propaganda.
If you did not read my previous posts about the BRIC's here is a link.
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Ruble continues to weaken by the day at an alarming rate for the Russian people.
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Russia tried to defend the Ruble. Not doing a good job of it.
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Q Can't understand: is not exactly how it was before the war and from the 2020?
Answer @stefanoborghi, No. This is far worse. Before the war, there were no sanctions and imports flowed. Now imports have collapsed leaving only exports. This creates a build-up of foreign reserves.
Intuitively one would think this is good and strengthen the Ruble. However, the real economy has suffered without imports. Many biz that sold imports are going out of biz or struggling to survive. This kills the economy and the currency. Factor in the 1 million men that were drafted, 200k dead, wounded, captured or still fighting with the 1 million additional men and women who have fled Russia and you have yourself in an economic disaster area.
Not to mention the sell of oil is now sold for a huge discount to market prices. Black market exchange is up to 250 rubles to $1 the further away one is from Moscow.
Collapsing the economy from 5% growth to 4% contraction (-9%) is like hitting a brick wall at top speed in a Lambo! 11% Inflation makes it even worse! Any economic positive news is in working for the war machine. But that is catastrophic in of itself as bombs bullets tanks are not an investment in the future economy. They go poof and that's it. When the war ends then what? The entire economy will collapse into a depression. Russia is on the verge of a humanitarian crisis again!
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Russian money supply has risen 28% since the start of the war and it will only get worse.
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Ruble struggling to hold on to 80.
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USD against the Russian Ruble is on the verge of busting out.
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USD breaking out against the Ruble. Now 82.45 to buy $1
Remember "sanctions don't work." LOL!
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The Russian Ruble continues its collapse 84.65 for $1
Remember "sanctions don't work." LOL!
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Who wants to buy cheap, cheap rubles now? I am glad to see the BRICS are doing GRRRREAT!
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Russian Ruble Weakens after Munity The Russian ruble touched 87 per USD before settling near 85, the weakest since March 2022, amid increasing political turmoil in the country following an aborted mutiny during the weekend...
Russia has now increased its money supply by an unbelievable 57% since the start of the war. As a result, the Ruble is collapsing with no end in sight. Even with rates at 16%.
so what? it is basically on the same level like before 2022 war and full scale sanctions. so funny that you dont mention it... also, its funny how you forget that sanctions work BOTH ways. talking mostly about EU here which sanctioned ITSELF and Russia.
I am glad you agree the sanctions are working and Europe did not freeze after all.
interloperxx
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@RealMacro, you seriously lack reading comprehension skills, goodluck in your future "analysis" anyway...
I wont comment on your 80:1 or 1:80 remark, as it is not worth at all, let me just say that such remarks are NOT posted by people who claim to be pro fx traders :-)
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@interloperxx, $80 to buy 1 Ruble puts it all in perspective how the economic catastrophe really is in Russia.
Not much you can say. Chart won't change.
SlimBob314
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@interloperxx, insightful point. it is correct that sanctions are often actually restrictions on prosperity at home. it is a clumsy, foolish tool and only the psychopathic or uninformed find them prudent.
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@SlimBob314, Prosperity at home is a restriction on prosperity brought on by the ruling Gov't. In Russia's case, it is Putin (the hero of the stupid) who is killing Russians, Destroying the currency, causing "Restrictions on prosperity" bc Putin is a war criminal who has been elected by the people of Russia overwhelmingly (if you believe the propaganda.)
@RealMacro, hello! Ruble is kind of steady! under central bank's control! nowhere near yours "250-300" to 1 "monopoly money" though! How is American debt btw? more monopoly money printed soon ? :-)
RealMacro
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@interloperxx, hahah! Yes the word stability and ruble are used interchangeably
so funny that you dont mention it...
also, its funny how you forget that sanctions work BOTH ways.
talking mostly about EU here which sanctioned ITSELF and Russia.