The drastic measures announced by Putin to support the ruble in the face of brutal Western sanctions

The Russian President, Vladimir Putinlashed out on Monday against the brutal sanctions imposed by the Western “empire of lies” in response to the invasion of Ukraine and announced drastic measures to stop the fall of the ruble.

Residents of Russia will no longer be able to transfer currency abroadthe Kremlin announced in a decree later in the day.

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In addition to this measure,Exporters will also be forced to convert 80% of their income earned in foreign currencies into rubles from January 1, 2022.

The ruble plummeted to record lows on Monday since opening of listings on the Moscow Stock Exchange.

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At the close, it was trading at 94.6 rubles per dollar, compared to 83.5 on Wednesday.

To defend the economy and currency against Western sanctions, the central bank of Russia doubled its benchmark interest rate of 10.5 percentage points, taking it to 20%. The Moscow stock market remained closed, due to the sinking of the currency.

Among other sanctions, The United States, the European Union and other countries have excluded the largest Russian banks from the Swift international banking payment system and banned any transactions with the Russian central bank.

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Trade retaliation measures were also announced, such as the closure of airspace to Russian planes by Europe.

Russian television broadcast images of a meeting, organized in response to the sanctions, between Putin, Prime Minister Mikhail Mishustin, Finance Minister Anton Siluanov, the president of the Russian central bank, Elvira Nabiullina, and the general director of the largest bank of the country, the Sberbank.

The Kremlin spokesman, Dmitri Peskov, acknowledged a little earlier that the sanctions of the Western powers were “tough” and constituted a “problem”, but that Russia had “all the necessary potential to compensate for the damage”.

The Kremlin has not announced any additional measures in reaction to the sanctions for now.

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“The measures taken (…) reduce volatility,” Alexei Vedev, an analyst at the Gaïdar economic institute, told AFP. “The uncertainty is huge and the central bank is right,” he added.

worried tycoons

But, in a rare reaction, some Russian tycoons publicly expressed their discontent.

“It is a real crisis, and real crisis experts are needed (…) we must absolutely change our economic policy and put an end to all this state capitalism,” Oleg Deripaska, the billionaire creator of the aluminum giant Rusal, wrote on Telegram.

He said that he expected from the government “clarifications and clear comments on the economic policy of the next three months.”

For Serguei Khestanov, macroeconomic advisor at Open Broker, Russia still has some margin. “As long as there are no real sanctions on Russian exports, especially oil and gas, there will be no catastrophe,” he said, although “people will, of course, feel” the effects.

In fact, some Russians preferred to withdraw their savings from the bank, worried about their savings.

It was the case of Svetlana Paramonova, 58 years old. She wants to “withdraw all her money to keep at home,” she said. “It’s safer, since we no longer understand anything that’s going on,” she summed up.

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Source: Elcomercio

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