- Joined
- Apr 18, 2013
- Messages
- 94,329
- Reaction score
- 82,720
- Location
- Barsoom
- Gender
- Male
- Political Leaning
- Independent
Banks are stopping Putin from tapping a $630 billion war chest Russia stockpiled before invading Ukraine
50% of the hard currency Russia Central Bank Director Elvira Nabiulina had stashed away to prop up the Russian economy in an emergency is now unavailable. This is a serious blow to the Kremlin and Russians.
On the day before Putin's invasion of Ukraine, the Russian rouble was valued at 81 to the dollar. Today it is 118 rouble to the dollar. This is crushing and will turbo-charge inflation and a cascade of bankruptcy.
Russians have not saved money. They have been living on credit cards. Moody's and Fitch has downgraded Russian stocks and derivitives to "junk" status.
Russian rouble slides further after ratings downgrades
3.3.22
Russia's central bank has been stockpiling foreign reserves ever since Russia last invaded Ukraine, when President Vladimir Putin annexed Crimea in 2014. Since then, Russia's holdings of foreign currency and gold have almost doubled, ballooning to $630 billion today from $368 billion seven years ago. Building foreign reserves could have been a way for the Kremlin to guard Russia's economy against sanctions, by giving the central bank more ammunition to protect the value of the ruble. The ruble lost half its value against the U.S. dollar after Russia annexed Crimea, forcing Russia's central bank to spend $130 billion to stabilize the currency. Except it turns out Russia’s foreign reserves strategy had a major flaw: about half of the money was held overseas in foreign banks—and now Russia can’t get to it. On Monday, the U.S., Japan and the European Union barred Russia’s central bank from tapping into the billions of foreign reserves Moscow had been saving up in their banks. "As Russian forces unleash their assault on Kyiv and other Ukrainian cities, we are resolved to continue imposing costs on Russia that will further isolate Russia from the international financial system and our economies," the leaders of the allied economies said in a joint statement announcing the accounts freeze on Feb. 26.
50% of the hard currency Russia Central Bank Director Elvira Nabiulina had stashed away to prop up the Russian economy in an emergency is now unavailable. This is a serious blow to the Kremlin and Russians.
On the day before Putin's invasion of Ukraine, the Russian rouble was valued at 81 to the dollar. Today it is 118 rouble to the dollar. This is crushing and will turbo-charge inflation and a cascade of bankruptcy.
Russians have not saved money. They have been living on credit cards. Moody's and Fitch has downgraded Russian stocks and derivitives to "junk" status.
Russian rouble slides further after ratings downgrades