Why is the Ruble (Still) Declining?

While the ruble fared better than expected last year, this year has seen a prolonged decline in its value despite rising oil prices. So in this video, we'll break down the data, explain why the ruble has declined and why this is bad news for Putin.

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00:00 Introduction
01:08 What’s Happened to the Ruble?
02:34 The Ruble’s Decline
06:04 Why has the Ruble Collapsed?
08:19 Brilliant

[Tekdruid]

Basically, the Ruble has been on life support since the sanctions started. They're running out of ways to artificially prop it up anymore.

[SourVodka]

What’s the difference between a ruble and an empty soda can?
An empty soda can is redeemable for cash.

[SourVodka]

What’s the true price relation between the pound, the ruble and the dollar?
A pound of rubles is worth a dollar.

[SourVodka]

A Russian boy asks his dad for 1000 rubles to buy some candy from the store
His dad replies “1000 rubles? 1600 rubles is way too much to spend on candy. How much candy can 2300 rubles even buy?”

[ingetout]

The problem isn’t just that it is doing poorly against the dollar but also that it is trading very poorly against the Chinese Yuan and the Indian Rupee. It’s doing so badly that 1 Rupee is now worth 1.2 Roubles whereas .75 Roubles was worth 1 Rupee a year ago. In general the Rouble has fallen almost half from other currencies of the world compared to last year.

[-.]

Putin: - The sanctions make Russia stronger.
Also Putin: - Lift the sanctions, otherwise we will not sign the Black Sea deal.
Putin a year ago: - Look at the Ruble, the Russian economy is doing brilliantly.

[tombranch]

Russia has been artificially propping up the ruble for a while, but its effectively keeping it on life support.

[mspicer]

Best part about the Rubles downfall is that it hasn't even found the bottom yet. It dropped to 140 to the dollar at the outbreak of the war, when the Central Bank started working to revalue it. So that's probably in the right neighbourhood, it's going to continue falling, only now they can't prop it up. I figure 150 to the dollar, maybe 175, depending on whether the Russians have any kind of work-around for the myriad problems they're facing.

[Jefrings]

People always want an immediate effect on any situations.
The sanctions didn't seem to work at first, but with time, we can see their beautiful effects on the aggressive clumsy bear!

[pauluk]

I think we should remember that Russia had a rainy day fund for the war in Ukraine, they are using that to prop up the Russian economy and ruble, experts have predicted it will run out late this year, that's when Russia could be in trouble because the impact of the war in Ukraine is going to be felt far more on the Russian people, something Putin is desperate to shield them from so he doesn't lose popularity, but the hard thing to predict is how much oil and gas revenues from last year will have delayed this impact.

Another factor we should remember, sanctions usually take years to do the real damage, the damage being done to Russia is actually very predictable going on what we've seen in the past, basically, sanctions hit hard at first, the country spends a lot to prop things up, that money runs dry and then the country starts to decline, sometimes at a rapid rate, so it's not strange what we are seeing in Russia at the moment and it could have been a lot worse for Russia if Putin didn't put a lot of money aside for the war in Ukraine, after all, he thought the war would be over quite quickly, that's where the real problem is for him, he can't afford this war to keep dragging on as it's a drag on the economy they can't afford, whereas the west can afford to keep arming Ukraine indifferent because they are a lot richer and the resources is being spread out over so many big powers, so what we are seeing in Russia is a slow decline, which is I think what the west and especially the US wanted because it keeps things stable whiles weakening Russia's political and economic power over the long run.

The west very likely knew this was going to be drawn out over some time, and in some ways, it might be better to have a slow decline of Russia and not a something that falls apart overnight which can be very unpredictable in the outcome, but that is unfortunate for Ukraine, because it drags the war out a lot longer.

[-.]

The collapse of the Ruble is my favorite topic.

[idpro]

I think 1€ = 200 ruble should be the goal for this year. 👍🏽

[SourVodka]

What do you call 50 cent the rapper in Russia ??

203, 714 Rubles

[RespectTheGanja]

Why would any country choose to pay more than the g7 cap and also risk losing insurance

[MrWaterbugdesign]

I don't think the ruble has decoupled from oil prices. The ruble is still being pushed up (falling less fast) by oil. If oil falls the ruble will get way weaker.

[stuartmiddleton]

When talking about the strength / weakness of the Ruble, can you please flip the axis on the charts on screen. The host say the ruble falls and the chart goes up (and vice versa), its very confusing.

[klaasdeboer]

The graph in the beginning would be easyer to understand if you showed the amount of dollars a rubel can buy, now the graph goes up when the rubel goes down, which looks confusing.

[SourVodka]

I just found out I'm a millionaire!
I converted my paycheck to rubles.

[SourVodka]

Know what they called the Russian Ruble last week?
Currency

[DrVictorVasconcelos]

Any country with a significant reserve of dollars can weather a crisis like that for a year. As you said, it's monetary policy. It was always clear to me that the really bad position was arriving after that. Now, the ruble is down, and they no longer have said reserves.