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by Arnt 1497 days ago
No, it's because of capital controls and central bank support. Selling rubles is very nearly forbidden for Russians, and the central bank has spent $50B on supporting the ruble.

I don't understand the latter. What's the point of doing that? It's a very great deal of money, so there should be some really good reason.
3 comments
neilwilson 1497 days ago
How can the central bank have done that given they are banned from transacting in dollars?

The central bank of Russia has just relaxed its controls on Russians moving money to friendly countries.

https://apple.news/AfMMfcmbfTHS_nbGj96-nRA

Isn’t it just the case that Russians have no need of dollars because they can’t buy anything with them. So they get rid of them for roubles which they can use to buy things.

Demand and supply does the rest.

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Arnt 1496 days ago
Their central bank is only sanctioned in about two dozen countries. It can conduct dollar transactions in India, for example.

I assume the sanctions also cover Indian subsidiaries, so the Russians won't be able to trade against e.g. Goldman Sachs's Indian subsidiary. But there are plenty of banks that aren't owned by motherships in the two dozen sanctioning countries.

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twelve40 1497 days ago
> It's a very great deal of money, so there should be some really good reason

They were probably outright selling lots of currency during the hot days in Feb and March to stop the immediate exchange rate freefall, that's where the $50B most likely went. Since then, the imports plummeted but the export dollar amounts soared because of high energy prices (despite slightly lower physical volumes), so the curbs and the market took over for now. We'll see what happens next.

Btw: no, selling rubles is not forbidden, as a consumer you could sell rubles pretty close to official exchange rate in April (not sure about now), and they just announced you can wire $50k to foreign banks per month starting today. No idea about larger amounts.

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netsharc 1497 days ago
Paul Krugman's guess[1] is that since Putin wants to sell a smoke-and-mirrors idea of "Everything is fine, Russia is winning!", having a number (the exchange rate) not match his bullshit would mean an obvious "This guy is full of shit" to anyone paying attention. So, he's made the central bank boss[2] (a respected competent lady, who rumors say tried to quit but was not allowed by Putin) do anything she could to make it look decent.

[1] https://www.nytimes.com/2022/04/01/opinion/russia-ruble-econ... [2] https://www.nytimes.com/2022/05/09/business/elvira-nabiullin...

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