So when the Russian central bank knocked down the ruble, you had this big long winded post how that was all good and needed, “hurting exporters”. So now that intervention has failed and the ruble is even stronger, what do you say now?
Okay, I will go over this again for you. You tried to make a big deal out of the ruble falling back from the highs it had recently made. You interpreted that as an indication of developing negativity about Russia’s future.
So I posted and explained to you that it was caused by a deliberate attempt (lowering interest rates) by the Russian central bank to lower the ruble which had been soaring because a very strong currency creates problems for exporters.
At the time I pointed out that despite 3 interest rate reductions they could not get the ruble as low as they desired. In the last statement issued with that interest rate reduction they indicated they expected they would need to do a further 100 basis points reduction.
If and when that happens the ruble will likely decline again...temporarily. Central banks cannot control currency rates. They can, and do, enact policies that can nudge rates in their desired direction.
All central banks do this, including our own. But, nudging does not mean they can set the currency rate. I and most economists expect the ruble to strengthen over time because Russia’s economic picture is becoming more favorable. They own what everyone wants to buy.