The Demolition of Russia's Economy

Discussion in 'Politics' started by gwb-trading, Mar 4, 2022.

  1. gwb-trading

    gwb-trading

    Drip, drip, drip... every week more frozen Russian funds go to Ukraine.

    The end is near for the Russian economy. How's the ruble doing? Or should we call it rubble.
     
    #1531     Oct 11, 2023
  2. gwb-trading

    gwb-trading

    Putin desperately tries to prop up the ruble.

    Russian ruble surges after Putin ordered 43 companies to prop up the slumping currency by selling some of their foreign cash
    https://finance.yahoo.com/news/russian-ruble-surges-putin-ordered-163316866.html

    The ruble gained against the U.S. dollar on Thursday after Russian President Vladimir Putin moved to reintroduce currency controls in an effort to salvage his nation's tumbling currency.

    The Bank of Russia has endorsed the move, according to Reuters, after months of pushing back and favoring instead the adoption of higher interest rates to curb the ruble's devaluation. It said the measures could prop up the fluctuating currency and improve liquidity.

    Putin signed a decree Wednesday meant for Russian export companies—43 of them in total across energy, agriculture, and other sectors—to sell some of their foreign currency revenues on domestic markets in exchange for rubles to help bolster Russia's currency.

    “The main purpose of these measures is to create long-term conditions for increasing the transparency and predictability of the currency market, [and] to reduce the opportunity for currency speculation,” the Russian First Deputy Prime Minister Andrei Belousov said in a statement, CNN reported.

    The move has helped the ruble inch up against the U.S. dollar by roughly 4%, hitting a two-week high. But the currency remains significantly lower—about 23% down this year.

    The ruble trouble started shortly after Russia invaded Ukraine last February, which prompting a slew of Western sanctions ultimately resulting in an all-time low of 120 rubles against the U.S. dollar. At that time, the Kremlin also introduced capital controls, making exporters exchange at least 80% of foreign currency revenues in the form of U.S. dollars, euros or other currencies, for roubles. Three months later, the threshold was dropped to 50% before it was scratched altogether.

    Russia policymakers have been on edge as the currency neared the psychological threshold of 100 rubles to a dollar last week. The ruble actually crossed that barrier in August, sparking an emergency central bank meeting, a series of rate hikes amounting to 550 basis points, and a decision to halt foreign currency purchases on the domestic markets over the following months.

    Despite the Kremlin's efforts to shore up the ruble, the currency continues to remain under pressure due to capital outflows and poor exports. Putin has acknowledged the pressures amid soaring inflation.

    But some experts see this measure as a possible path to the ruble regaining some of its strength relative to the dollar.

    "If the parameters of our export goods remain the same…some more strengthening is possible," Herman Gerf, CEO of Russian lender Sberbank said, according to TASS news agency, Reuters reported. "The regular, fundamental exchange rate today is 85–90 per dollar."

    This story was originally featured on Fortune.com
     
    #1532     Oct 13, 2023
  3. Atlantic

    Atlantic

    do i smell desperation?
     
    #1533     Oct 13, 2023
  4. TheDawn

    TheDawn

    What else is new? Unless you go in and take the guy out, whatever you do outside the country only ends up hurting the ordinary people. The West saw this when they put sanctions on Iraq and they saw it didn't do s*** besides making the ordinary Iraqi people miserable and nothing really changed until they went in and took Saddam out. Now they are doing this again.
     
    #1534     Oct 13, 2023
  5. gwb-trading

    gwb-trading

    Just when you thought Russia could not get any more stupid; we have this...

    Russia halts circulation of new banknotes because the church pictured on them does not have a cross on it.
    Facepalm: the church doesn't have one in real life.


    Russia halts circulation of new ruble note after complaints from priests
    Clerics complained design of Kazan Kremlin lacked cross, even though it does not have one in real life
    https://www.theguardian.com/world/2...-new-ruble-note-after-complaints-from-priests
     
    #1535     Oct 19, 2023
    themickey likes this.
  6. Atlantic

    Atlantic

    :thumbsup:
     
    #1536     Oct 19, 2023
  7. Atlantic

    Atlantic

    #1537     Oct 20, 2023
    gwb-trading likes this.
  8. gwb-trading

    gwb-trading

    #1538     Oct 23, 2023
  9. gwb-trading

    gwb-trading

    Russia's worker shortage is so bad the economy is leaning on the Soviet-era practice of using prison labor
    https://www.businessinsider.in/poli...bor-think-tank-says/articleshow/104703997.cms
    • Russia is leaning more on prison labor amid a dearth of available workers.
    • Income generated from forced convict labor notched 19 billion rubles last year.
    Russia's worker shortage is so bad, the nation is increasingly leaning on prison labor to prop up its ailing industries and make up for a lack of manpower.

    In 2022, Russia pulled in an estimated 19.1 billion rubles, or around $204 million from forced prison labor, The Moscow Times recently reported, citing dating from Russia's finance ministry. That exceeded estimates that Russia made the year prior, when budget makers anticipated bringing in just 15.8 billion roubles from forced prison labor.

    The nation expected to rake in 15.9 billion rubles in 2023 and 16.2 billion rubles in 2024, according to 2021 budget estimates.There are around 26,000 Russian prisoners forced into labor across 1,700 organizations, according to August 2023 data from Russia's Federal Penitentiary Service. That's more than double what was reported in 2022, when 9,300 prisoners were forced to work, according to the research and analytics firm Jamestown Foundation.

    Those trends have been sparked by a record workforce shortage in Russia, with around a million Russians having fled the country to avoid fighting or escape Russia's difficult economic situation.

    "The Russian economy is facing harsh structural challenges, including the lack of a qualified work force," Jamestown senior fellow Sergey Sukhankin said in a note on Monday. "The Kremlin has sought to integrate prison labor with certain sectors of the domestic economy to solve this issue."

    The use convict labor isn't new to Russia. The practice dates back to the Soviet era's "Gulag" system, where convicts were assigned to work in the riskiest and most "lucrative" sectors of the Soviet Union's economy, Sukhankin said.

    Prison labor could eventually evolve into a system similar what was seen in the Soviet Era, Sukhankin added, assuming that Russia's current leadership survives conflict in Ukraine.

    "The recent uptick in the use of forced prison labor in Russia is not merely the transient trend of a post-COVID, economically troubled, or war-hurt Russia. In the event that [...] Vladimir Putin survives the war in Ukraine, the use of prison labor in Russia might evolve into a system similar to the Soviet period," Sukhankin added.

    Economists, meanwhile, have been sounding grim warnings for Russia's future as the nation continues to be battered by war and western sanctions. Predictions have been as dire as Russia becoming a failed state over the next 10 years, as sanctions bite and its reputation as a pariah state isolates it from world trade.
     
    #1539     Oct 25, 2023
    Atlantic likes this.
  10. gwb-trading

    gwb-trading

    #1540     Oct 26, 2023