Opinion | How the West can increase its chokehold on Russia’s economy
- The rouble’s depreciation has highlighted just how much pressure the war in Ukraine – and the sanctions imposed in response – has placed on Russia’s economy
- While the sanctions are clearly working, Putin’s continued ability to fund his war shows more must be done
Russia’s leaders have less to celebrate today. The rouble exchange rate offers the most visible indication of Russia’s economic performance, at least for Russian households.
So, the currency’s recent dip below the politically important threshold of 100 to the dollar made the Kremlin nervous. And it put the central bank – which, over the past year, has loosened or removed many of its capital controls – under fire.
Putin’s economic aide, Maxim Oreshkin, wrote an op-ed blaming policymakers for being too “soft”. The central bank immediately called an extraordinary board meeting, where it decided to raise interest rates by 3.5 percentage points, and signalled that more hikes are likely to come.
Additional currency controls also appear to be on the table. Meanwhile, Finance Minister Anton Siluanov reportedly advocates forcing Russian exporters to repatriate their dollar revenues and sell them to the central bank.
