As Russians and their supporters on Twitter and Telegram cheer the riots in France – apparently some sort of consolation for them after Europe didn’t freeze and Russia lost more than 230,000 of its men in Ukraine – things are getting really bad for Russians at home. As expected, the Russian Ruble is crashing to all-time lows.
Russia had successfully delayed the inevitable crash of its currency by banning the sale of the Ruble, and restricting foreign currency exit flows from the country. You can see the US Dollar spike in value against the Ruble when Russia invaded Ukraine, a move which reverted by the actions of the Russian Central Bank – the Russian Central Bank’s moves are however only effective as long as Russia has foreign currency, and that foreign currency is drying up fast. There are signs that even its major companies are facing cash-flow problems. Gazprom, once flush with foreign currency, is currently getting loans in Rubles from the Russian Central Bank’s loan facilities that were originally intended for commercial banks.
Lately, the Chinese Yuan has been falling rapidly in value against the US Dollar as well and this adds to problems for Russia after it sought to change its foreign currency inflows from foreign trade into Yuan as its access to US Dollars and Euros got restricted. So much for the US Dollar is going to collapse and BRICS-Gold-Backed-Glorious-Communist Currency. There’s no liquid alternative to the US Dollar, other than the Euro, maybe, and Russia can’t even have that.
It would be great poetic justice if Russia’s war in Ukraine ends as Russia spirals into one of its greatest economic and monetary meltdowns in history.