The Guardian reports:
Russians are wondering whether the relative economic stability of Vladimir Putin’s rule has come to an end, as the rouble continued its downward spiral on Tuesday, despite a dramatic overnight rise in interest rates.
“Even in our nightmares we couldn’t have imagined what is happening now a year ago,” said the deputy chairman of Russia’s central bank, Sergei Shvetsov, as the currency slid further against the dollar and euro.
Analysts suggest a combination of falling oil prices and western sanctions over Russia’s actions in Ukraine initiated the rouble’s collapse, while further decline is taking place as investors panic and lose confidence in the currency.
As ordinary Russians watched their savings lose more real value on Tuesday, an unusually bitter polemic broke out between senior government officials. In a system where public disagreement is rare, the outbursts were a sign of how serious the tension is, as officials scrambled to deflect blame from themselves for the rouble’s slump.
The central bank announced a rise in interest rates from 10.5% to 17% after a late-night meeting behind closed doors on Monday in a desperate attempt to stop the slump. After a brief rally on Tuesday morning in response to the move, the rouble continued its fall and has now lost more than 50% of its value against the dollar since the start of the year. The rouble rallied again in the afternoon, recovering from a low point of over 100 to the euro to reach the 90 mark, but that figure still leaves Russians stunned, given the rate at the beginning of this year.
Putin may end up losing office over his invasion of Ukraine. The economic pain for Russia will only get worse and worse, and there will come a point where Putin will be (rightfully) blamed.