When the world gets closer.

We help you see farther.

Sign up to our expressly international daily newsletter.

Russia

Why A Weak Ruble Weighs On The Entire Russian Economy

Analysis: The depreciation of the Russian ruble hurts the whole country, especially the poorer masses who don't deal in dollars. And no, you can't just blame it on foreigners.

Russia still has an uphill climb to broad prosperity (Marc Veraart)
Russia still has an uphill climb to broad prosperity (Marc Veraart)
Elena Kotova*

MOSCOW - We are being told not to storm the currency exchange bureaus, where people are already starting to fight over dollars. Meanwhile, experts are recommending that people divide their savings between rubles, dollars and gold.

That is all good advice, especially since most Russians don't have millions of dollars of savings, but maybe a few thousand. Salaries are paid in rubles, and that is what most of us use to pay for food, clothing and rent. For Russians, the standard of living depends primarily on the stability of jobs, salaries and prices, not on the growth of nest eggs.

But regardless, a weak ruble is a threat to all of those things, especially if you look not only at the past month, when the Russian currency dropped by 11 percent compared to the dollar, but also at the whole past year. The value dropped from 27.5 to 33.5 rubles per dollar over the course of last year, a 21 percent drop. That enormous plunge is a hidden devaluation. Slowly but surely products like Dutch butter, Australian beef, writing paper, pencils and mobile phones are getting more expensive.

Let's say that the government will keep rent prices down for low-cost shared housing, known as "communal" apartments. Faucets, light bulbs and pipes are made domestically, but the trucks that transport those supplies are certainly imported. And if the expenses for communal apartments go up, then either you have to subsidize the housing with the government budget (which means making cuts elsewhere) or you have to stop doing all renovations, and maybe cut off hot water.

Keep reading... Show less
You've reached your monthly limit of free articles.
To read the full article, please subscribe.
Get unlimited access. Support Worldcrunch's unique mission:
  • Exclusive coverage from the world's top sources, in English for the first time.
  • Stories from the best international journalists.
  • Insights from the widest range of perspectives, languages and countries
Already a subscriber? Log in

When the world gets closer, we help you see farther

Sign up to our expressly international daily newsletter!
Geopolitics

NATO Entry For Sweden And Finland? Erdogan May Not Be Bluffing

When the two Nordic countries confirmed their intention to join NATO this week, Turkish President Recep Tayyip Erdogan repeated his plans to block the application. Accusing Sweden and Finland of' "harboring" some of his worst enemies may not allow room for him to climb down.

Turkish President Recep Tayyip Erdogan declared opposition to Finland and Sweden entering NATO

Meike Eijsberg

-Analysis-

LONDON — When Turkish President Recep Tayyip Erdogan declared his opposition to Finland and Sweden entering NATO, it took most of the West's top diplomatic experts by surprise — with the focus squarely on how Russia would react to having two new NATO members in the neighborhood. (So far, that's been a surprise too)

But now Western oversight on Turkey's stance has morphed into a belief in some quarters that Erdogan is just bluffing, trying to get concessions from the negotiations over such a key geopolitical issue.

Stay up-to-date with the latest on the Russia-Ukraine war, with our exclusive international coverage.

Sign up to our free daily newsletter.

To be clear, any prospective NATO member requires the consent of all 30 member states and their parliaments. So Erdogan does indeed have a card to play, which is amplified by the sense of urgency: NATO, Sweden and Finland are keen to complete the accession process with the war in Ukraine raging and the prospect of strengthening the military alliance's position around the Baltic Sea.

Keep reading... Show less

When the world gets closer, we help you see farther

Sign up to our expressly international daily newsletter!
You've reached your monthly limit of free articles.
To read the full article, please subscribe.
Get unlimited access. Support Worldcrunch's unique mission:
  • Exclusive coverage from the world's top sources, in English for the first time.
  • Stories from the best international journalists.
  • Insights from the widest range of perspectives, languages and countries
Already a subscriber? Log in
THE LATEST
FOCUS
TRENDING TOPICS

Central to the tragic absurdity of this war is the question of language. Vladimir Putin has repeated that protecting ethnic Russians and the Russian-speaking populations of Ukraine was a driving motivation for his invasion.

Yet one month on, a quick look at the map shows that many of the worst-hit cities are those where Russian is the predominant language: Kharkiv, Odesa, Kherson.

Watch Video Show less
MOST READ