Russia's currency crisis: Vladimir Putin's shenanigans have finally caught up with him
Russia appeared to be heading for a serious currency crisis on Tuesday, as the ruble continued its slide over fears about the economy's stability amidst a historic drop in oil prices and Western-imposed sanctions. The New York Times reported that Russians are buying big ticket items like washing machines to convert their rubles into actual products before the value of their savings goes up in smoke.
On Monday, the central bank took the extreme step of raising its benchmark interest rate to 17 percent, from 10.5 percent, to stem the bleeding. But it hasn't worked so far, largely because investors are concerned about a shady deal that saw the central bank essentially print money to buoy the state energy giant Rosneft, which has been badly hit by a worldwide glut of oil:
Of course, the head of Rosneft, Igor I. Sechin, is closely tied to President Vladimir Putin. As Leonid Bershidsky at Bloomberg View writes, "All who try to understand Russia's stormy markets today should keep in mind that they are dealing with a dictatorship, whose monetary authorities can only conduct reasonable policy until Putin says otherwise."
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
Create an account with the same email registered to your subscription to unlock access.
Sign up for Today's Best Articles in your inbox
A free daily email with the biggest news stories of the day – and the best features from TheWeek.com
Ryu Spaeth is deputy editor at TheWeek.com. Follow him on Twitter.
-
The toilet roll tax: UK's strange VAT rules
The Explainer 'Mysterious' and 'absurd' tax brought in £168 billion to HMRC last year
By The Week UK Published
-
Why is Tesla stumbling?
In the Spotlight More competition, confusion about the future and a giant pay package for Elon Musk
By Joel Mathis, The Week US Published
-
How Taylor Swift changed copyright negotiations in music
under the radar The success of Taylor's Version rerecordings has put new pressure on record labels
By Theara Coleman, The Week US Published
-
Israel proposes two-month pause in Gaza war in exchange for all Hamas hostages
Speed Read Deal doesn't include an agreement to end war, but might be 'the only path that could lead to a ceasefire', said US officials
By Harriet Marsden, The Week UK Published
-
Nato official warns of all-out war with Russia in next 20 years
Speed Read Civilians must prepare for life-changing conflict and mass mobilisation, says military chief
By Harriet Marsden, The Week UK Published
-
Rishi Sunak visits Kyiv to announce £2.5 billion in military support for Ukraine
Speed Read Surprise trip comes amid increased Russian bombardment and escalation of Middle East crisis
By Harriet Marsden, The Week UK Published
-
British warship repels 'largest Houthi attack to date' in the Red Sea
Speed read Western allies warn of military response to Iranian-backed Yemeni rebels if attacks on ships continue
By Richard Windsor, The Week UK Published
-
Israel preparing to flood Hamas tunnels with seawater
Speed Read IDF pumps could drive out terrorists but critics warn of danger to hostages and Gaza water supply
By Harriet Marsden, The Week UK Published
-
Houthi rebels claim Red Sea ship attacks
speed read Iran-backed Yemeni group vows to escalate aggression towards Israel-linked vessels in revenge for Gaza war
By Harriet Marsden, The Week UK Published
-
Israel plans next phase of Gaza war as first hostages released
Speed read After four-day ceasefire 'we will not stop' until destruction of Hamas, says Israel
By Harriet Marsden, The Week UK Published
-
Mob storms Russian airport 'looking for Jews'
Speed Read Plane from Israel surrounded by rioters chanting antisemitic slogans after landing in Russia's Dagestan region
By The Week UK Published