Post
Topic
Board Economics
Can current sanctions Ruble inflation stop Russia?
by
Synchronice
on 28/02/2022, 22:38:37 UTC
Read the whole post because I don't discuss only about paper money!

It seems that almost the whole world decided to isolate itself from Russia while the economics of Russia is connected with the western world and if we keep in mind its GDP and other factors, then the cons will terribly hit them.

It's expected by some economic experts that SWIFT ban will cause:
1. Up to 10% recession.
2. Up to 50% decline in export.
3. Inflation of Rubble.

The Rubble lost more than 30% of it's value in recent days.
Officially Russia’s Ministry of Finance has ordered businesses that trade abroad to sell 80% of their foreign currency earnings and convert them to rubles.
You may notice at streets that some banks and currency exchange services offer very different rates on buy/sell orders. You have to sell X Rubble to buy 1 USD but when you sell 1 USD, you get half of X.

Ukraine also asks crypto exchanges to ban people from the Russian Federation and there is a chance (slight to my mind) that this will happen.

It looks like, Russia will be left majorly with only Rubble. Paper money has no value if no one wants it, doesn't matter how big reserves you have. Once valid and useful money reserves can turn into totally unuseful papers because none country wants to trade with you with it. And locally Russia isn't a strong country, they can't produce computers, smartphones, high-quality technics. They will have to say no to a comfortable life.

But can that stop Russia? During world wars, they survived with water, vodka and bread.