Ruble rebounds to pre-war ranges. Putin’s plan is working for now

Russia’s central bank has taken dramatic steps in recent weeks to intervene in the market, implementing policies to prevent investors and companies from selling the currency and other measures that force them to buy it.

What has Moscow done to boost the ruble?

• The central bank has more than doubled interest rates to 20%. That encourages Russian savers to keep their money in local currency.
• Exporters have been ordered to swap 80% of their foreign currency revenues for rubles rather than holding onto US dollars or euros.
• Russian brokers have been banned from selling securities held by foreigners.
• Residents are not allowed to make bank transfers outside Russia.
• Russia has threatened to demand payment for natural gas in rubles, not euros or dollars.

These measures have allowed Moscow to artificially manufacture demand for the ruble. The problem facing policymakers is that with Russia’s economy in tatters, nobody actually wants to buy the currency of their own…

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