Posted on 04/25/2022 1:21:54 AM PDT by Cronos
In revealing testimony before the Duma parliament, the head of CBR told she had to throw everything but the kitchen sink just to prevent a full-blown run on the banking system.
“The sanctions imposed against Russia affected the situation in the financial sector, spurred the demand for foreign currencies, and caused fire sales of financial assets, a cash outflow from banks, and surging demand for goods,” said Elvira Nabiullina ... Presenting the CBR’s annual report to parliament, Nabiullina painted a picture to lawmakers of just how grim the situation was that confronted her.
Depositors withdrew 2.4 trillion rubles in the first weeks after the war broke out, eating up a year’s worth of bank profits and a third of its accumulated capital cushion.
Without the imposition of strict capital controls, there would have been “a series of defaults and a domino effect” throughout the financial system ... Numerous moratoriums have also been granted that ease regulatory requirements for banks, with accountants effectively allowed to freeze value of assets on their balance sheets at artificially high pre-crisis levels.
Marking them down to reflect the reality of Russia’s shrinking economy would only trigger a crippling wave of deleveraging among lenders—either through divestments, a withdrawal of credit to the economy, or a mixture of both.
“Today’s scale of the regulatory easing is unprecedented,” she admitted, arguing that otherwise easing measures would not have been commensurate to the scale of problems faced.
“The sanctions have affected the financial market, but now they will start to impact the real economy increasingly more significantly,” the governor said. “Already in the second quarter, beginning of the third quarter, we will actively enter a period of structural transformation and the search for new business models for many enterprises.”
Translation: Russian companies haven’t even begun to feel the pain.
(Excerpt) Read more at fortune.com ...
For example, she said, Russia produces its own paper but uses foreign bleaching agents, or urgently needs foreign-made packing materials for foodstuff produced in Russia
Let’s hope this gets Putin to stop this war that is damaging everyone.
There are ways to solve paper and packing issues. “Ending the war” is not one of them.
Yeah, but they have the new SATAN II missile ...
Ruble is now trading at less than 77 to Euro. This was is the best thing that happened to the Russian economy in a decade. It seems like in a couple of years the Russian janitor is going to make more than an engineer in Germany.
Sure, who is asking to?
Russian interest rate: 17%
Euro interest rate: 0.17%
For Russia to keep the ruble afloat it needs to pay an interest rate 100 times that of the Euro.
So you admit that it is a war and not a “special operation”?
To pay whom? Compare Russian and Euro debt. Now imagine what the combination of 10% inflation and 0,17% interest rate is doing to the European retirement savings. What would it be like when they’d have 20% inflation? It nice to be a Russian nowadays!
What difference does it make?
There is next to no currency trading allowed in roubles.
That’s why it is “officially” at 77 rubble to the dollar. Just like North Korean currency is “stable”.
The black market rate for rubble is closer to 150 rubble to the dollar.
Several chats in the Telegram messaging app have sprung up in which people in Russia are arranging to meet on the streets and other locations to buy or sell currency
It makes a difference.
You then agree that Russia is at war with Ukraine, and this is not a “special operation”?
To elaborate, You can basically only buy roubles in Russia, and Putin has simply decreed that the exchange rate isx rubble to the dollar.
This is called a currency controlled state. The value of the Ruble is not the official rate about 80 to the dollar. If you meet someone in Moscow at a metro station you might get 150, 250 or even 300 rubles for you dollars.
The danger is that you could be arrested for making such a deal.
So much for CLUELESS, LYING IDIOT POOTIES that said the sanctions had little effect.
“Ruble is now trading at less than 77 to Euro. “
Thats what paying an insanely high interest rate of 16% will do. Don’t come in here and try to blow bubbles and unicorns up everyone’s butt that all is well. Zimbabwe and Argentina also have to pay insanely high interest rates to keep their currencies from collapsing.
Putin through a hissy and threatened to nuke everyone involved in the sanctions because he did not like the “best thing to happen to Russia in a decade”. Very odd behavior.
I do have a lot of respect for the lady in charge of the Russian central bank.
She’s done a better job than the generals.
But as is clear from what she told the Duma, she’s thrown everything, including the kitchen sink, and she’s out of options.
That’s basically your fantasy. If you are connected to a broker you can buy at the exchange rate of 72,90 as of now. Then you can transfer it into your bank account, but you better do it with the large sum, because my broker for example charges $45 for transaction, be it the transfer of $20 or $200,000.
That metro-station BS are nothing but stupid media tales. You can buy foreign cash at banks, although the rate is worse compared to stock brokers.
It is not 150 or 300, but more like 82-87 depending on bank though.
As for the controlled currency, there are no indicators of the centbank intervention.
Why should ruble fall in your opinion? What economic factors are against it?
It is going to be below 10% by the end of summer.
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