What is really quite interesting about the Ruble now is that it's legal to trade it, but you will find almost nobody in the European Union any more who is willing to exchange it. The exchange possibilities either way are also quite limited in Russia at this point. Handling it has become complex and expensive.
Rather ironic when the propogandists rant and rave on their TV about how Russia don't need the West etc ... unless they want their population to live on nothing like North Korea it seems you really can't decouple yourself from the rest of the world.
unless they want their population to live on nothing like North Korea
The exchange rate is irrelevant to people who are not importers or exporters. A ten-rouble cabbage is always a ten-rouble cabbage within Russia. And a five-dollar coffee in the US is always a five-dollar cup of coffee, no matter what any of the external exchange rates is.
For importers a high rouble-dollar exchange is required, it makes imports cheaper in roubles.
For exporters, a low rouble-dollar exchange is required, it makes exports bring in lots and lots of roubles.
Russia is a net exporter of goods. The lower the rouble-dollar exchange rate the more roubles that Russians receive for their sales. What's not to like?
For countries like the US, who are net importers, a high exchange rate is necessary, otherwise imports would be too expensive to buy.
That's how I understand it. But that won't stop people from submitting the same subject ('rouble tanks') 10 times to Hacker News as if to prove their opinion of this conflict.
Nabiullina at the CBR has always been hard for me to read. (From memory: before the SMO, her policies seemed too conservative and restricted credit for SMEs.) So why did the CBR raise the guiding rate so drastically? Theories abound: a knee-jerk reaction to the RUB's depreciation compared to other major currencies or the intention to curb expected inflation due to next year's social budget. But IMHO a relatively weak RUB is clearly advantageous given the balance of trade and fiscal recettes are indeed higher.
