The Ruble’s Fall Points to Pain but Not Collapse
Thanks to the ingenuity of finance officials and entrepreneurs, Russia remains economically resilient and can still fund its wartime budget.
The ruble is getting rubbled.
Photographer: Kirill Kudryavtsev/AFP via Getty Images
When the Russian ruble stabilized soon after Russia invaded Ukraine last year, the currency’s immunity to war was often cited as evidence of Russia’s economic resilience. Now, the ruble is at its lowest level since March 2022, and it doesn’t seem to have anywhere to go but down.
Contrary to the headlines that link the decline with the recent mutiny by caterer Yevgeny Prigozhin’s Wagner mercenary army, the ruble’s decline has less to do with that short-lived upheaval than with the fundamentals of Russia’s peculiar wartime economy, a bastard mix of Cold War-era attempts at self-sufficiency and a need to maintain enough market freedom to avoid a collapse. The Russian currency has been in a marked decline since late 2022. It’s the third worst performer on Bloomberg’s extended list of major currencies so far this year, after the Argentine peso and the Turkish lira.