• Markets
  • Crypto
  • Web3
  • Culture
  • Opinion
  • Politics
Subscribe
  • Login
  • Register
No Result
View All Result
  • Markets
  • Crypto
  • Web3
  • Culture
  • Opinion
  • Politics
No Result
View All Result
No Result
View All Result

Is Russia Running Out of Money?

26/04/2022 15:35
No comments
The Russian central bank.

The Russian central bank.

“The period when the economy has been able to live on the reserves is over.”

So said the president of Russia’s central bank, Elvira Nabiullina, in the Russian parliament this Thursday.

She further warned that “in the second quarter or at the beginning of the third, we will enter a phase of structural transformation.”

There’s speculation a double digit drop in imports has been seen this March, with authorities there deciding to no longer publish import and export figures.

“Due to sanctions, Russian consumers and manufacturers are losing access to markets for the import and export of finished products and components,” Nabiullina said. “Problems may arise even when production has a high degree of localization when there is a sufficiently high degree of import substitution.”

Her most revealing comment may be in regards to reserves, with Nabiullina stating they’re in gold or yuan “which does not allow us to manage our currency in the internal market.”

USD/Rub, April 2022
USD/Rub, April 2022

The rest may have been spent to artificially strengthen the ruble which is now worth even more dollars than before the war.

Without a central bank intervention, there may have been a natural correction here, but to 120, or 100 at most.

The ruble now rising to almost 70 makes it plain that this is probably a very expensive operation, especially when Russian stocks tell a very different story.

MOEX Russian stock index, April 2022
MOEX Russian stock index, April 2022

Stocks crashed in Russia last month and at some point there was a bounce as you’d expect, but instead of some return to normal or a V shaped recovery, they’re now headed down again to reflect the worsening economic situation.

A central bank survey showed a more pessimistic outlook, with most expecting a contraction of 9.2% now, from 8% previously.

Inflation is expected to jump to 22%, and that’s with current sanctions, but sanctions too will get worse.

“We are working on a sixth sanctions package and one of the issues we are considering is some form of an oil embargo,” said Valdis Dombrovskis, the European Commission’s executive vice-president. “When we are imposing sanctions, we need to do so in a way that maximises pressure on Russia while minimising collateral damage on ourselves.”

Oil sanctions will directly hit the Russian state, which may be depleting their savings but is still receiving income.

Once euros are no longer flowing, they’ll find themselves both with no savings and with reduced income, at which point the whole economic situation will hit them.

In this quarter they might manage by the private sector having their own savings as shown by some airlines taking some planes out of flying to be used as spare parts.

In the third quarter however they might start feeling the pain with a very cold winter to probably follow, both on the ground and in company boards.

That may increase bitcoin adoption further there because the central bank probably won’t have much of a choice but to print as costs skyrocket while income plunges.

 

Related Posts

Crypto art

Can Ethereum’s Variable Tokenomics Address Inflation?

MicroStrategy HQ

MicroStrategy Increased Bitcoin Holdings

BlackRock ETF Tokenized on Uniswap

Nationwide Restricts Payments to Binance

Load More
  • Trending
  • Comments
  • Latest
Backed Finance tokenizing stocks, Feb 2023

BlackRock ETF Tokenized on Uniswap

HSBC's HQ at Canary Wharf in London

HSBC Looks to Expand to Crypto

Fed's balance sheet, Jan 2023

Fed Burns Half a Trillion

Investors cash levels reach all time high, Jan 2023

Investors Are Sitting on $5 Trillion

Crypto art

Can Ethereum’s Variable Tokenomics Address Inflation?

MicroStrategy HQ

MicroStrategy Increased Bitcoin Holdings

Backed Finance tokenizing stocks, Feb 2023

BlackRock ETF Tokenized on Uniswap

A Nationwide bank branch

Nationwide Restricts Payments to Binance

Comments

Latest News

  • Can Ethereum’s Variable Tokenomics Address Inflation?
  • MicroStrategy Increased Bitcoin Holdings
  • BlackRock ETF Tokenized on Uniswap

About Trustnodes

Terms of Service

Privacy Policy

Our Ethics and Values

Trustnodes Newsletter

(You have to be a paid subscriber)

Trustnodes © 2017-2023. All Rights Fully Reserved. For any Enquiries contact@trustnodes.com RSS Feed

No Result
View All Result
  • Login
  • Sign Up
  • Cart
  • Markets
  • Crypto
  • Web3
  • Culture
  • Opinion
  • Politics

Trustnodes © 2017-2023. All Rights Fully Reserved. For any Enquiries contact@trustnodes.com RSS Feed

Welcome Back!

Login to your account below

Authenticate with MetaMask Loading...

Forgotten Password? Sign Up

Create New Account!

Fill the forms below to register

*By registering into our website, you agree to the Terms & Conditions and Privacy Policy.
All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In
This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.
Are you sure want to unlock this post?
Unlock left : 0
Are you sure want to cancel subscription?