In Russia, the fall of the ruble accelerates, a two-year low has been hit

Published on December 2, 2024 at 10:25. / Modified on December 2, 2024 at 12:55.

3 mins. reading

Vladimir Putin assured him on Thursday, November 28: faced with the sudden sharp fall of the ruble, “the situation is under control, there is no reason to panic.” If the currency came close to the symbolic thresholds of 110 rubles per dollar and 115 rubles per euro, this would only be the result of “many seasonal factors” – inflation, payments to the budget, world oil prices, etc. The last time it plunged was in March 2022, just after the start of the Kremlin's “special military operation” in Ukraine, and the first Western sanctions against Moscow. Behind the presidential assurances, this fall in the ruble indeed reveals several realities, which undermine the economy, won by inflation, threatened with overheating and overtaken by uncertainties.

For the war economy that Russia has become – the military-industrial complex is now its primary engine of growth – this fall in the ruble is, a priori, good news. It boosts, at least in appearance, income from exports of raw materials, which are still mainly denominated in dollars.

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