Vladimir Putin’s luck may now be running out, with the ruble trading below 1 cent to the dollar, its weakest level since the early days of the war in Ukraine.
The Russian president, who briefly thwarted a coup attempt in June, is likely to point to the Russian currency’s resilience in the face of sanctions as a propaganda victory that demonstrates how powerless Western economic retaliation is.
More than 500 days since his army invaded Ukraine, the revered head of Moscow’s central bank no longer appears to be able to perform miracles for her boss.
The ruble, managed by Elvira Nabiullina, fell below psychological support at $100 on Monday and is now worth less than a penny for the first time since March 23 last year.
“They are laughing at us,” said Vladimir Solovyov, Russia’s most famous state television personality and a key Putin ally, tartly. last week.
The war hawk asked Nabiullina to explain to the crowd that the currency has lost about a quarter of its value against the dollar since the start of the year.
On Sunday, a photo was shared online small symbolic protest West Siberia: The administrator of a building keeps repeating the message that “Putin is an idiot and a thief” and calls the ruble exchange rate “crazy”.
Meanwhile, her agency countered that a weaker ruble poses no risk to the country’s financial stability.Despite this, the Central Bank of Russia decided to freeze the purchase of foreign currency in the domestic market for the rest of the year Restore confidence in the devaluation of the ruble.
Russia’s stronger currency a PR win for Putin
The ruble briefly rallied to unseen highs after the Feb. 24 intrusion sent the Russian fiat currency down to an all-time low of 120-120 against the dollar. since 2015 About $50.
This is an important PR win for the Kremlin, as it shows that the Russian economy is strong enough to withstand any attack from the West.
This, in turn, prompted reflections among Ukraine’s Western supporters, whose critics were more appalled by the costs of soaring food and energy prices than they were by the costs of Russian empire-building.
“Its value is slightly higher than the day Russia invaded Ukraine. In contrast, the economic situation in the United States is deteriorating rapidly.” Fox News host at the time Tucker CarlsonLeading critic of U.S. aid to Kiev says last april.
What is the clearest sign that Russia is losing the war? #Russia The ruble fell below 100 to the dollar for the first time in 17 months, slipping further and threatening to fuel inflation in an economy hit by Western sanctions. Year-to-date, the ruble is down 27% against the dollar and 23% against the dollar… pic.twitter.com/cr763vz21E
— Holger Zschaepitz (@Schuldensuehner) August 14, 2023
Nabiullina has been credited with deftly navigating her financial system through the worst of the turmoil by setting up a Scope of capital control This quickly stabilized the currency and prevented massive capital outflows.
“They are a quick fix for the ruble exchange rate in 2022, but will backfire in the long run,” wrote Janis Kruger, a senior fellow at the German Institute for International and Security Affairs. last week.
The new signs of economic weakness come at an important juncture in the war. Russian troops are trying to defend swathes of territory captured in the early months of the invasion against a Kiev counteroffensive with modern Western military equipment.
Any material losses on the battlefield could further erode Putin’s authority, which was already undercut following a June challenge by Wagnerian mercenary chief Yevgeny Prigozhin.
Svlook
