Russia-Ukraine Peace Talks Have Advanced To Point Where

The Ruble/USD has recovered back to what it was the day of the invasion.

But thanks for the insults as always.

 

Who cares? What does that have to do with whether the sanctions are working?

Your opinion is based upon currency speculators.

DD

 

Take it up with Adoo, not me. Im not sure why you're singling me out. Wait, I do.

Exactly how are the sanctions working? The countries who are not part of NATO are largely ignoring the sanctions.

 

The sanctions are working very well, Russia is on the verge of bankruptcy, there is not enough trade with other countries.....the Russian people have lost access to modern conveniences, food is running short, their internet is restricted, their social media $$$ and pages are gone....

DD

 

The Ruble recovered because Russia instituted incredibly restrictive capital controls and raised interest rates to 20%. Basically, the Ruble is no longer a free and convertible currency. Russia mandates that all citizens that earn money in other countries immediately convert their earnings to Rubles. Russia also prohibits foreigners from selling their holdings in the Russian stock market. Additionally, Russia restricts its citizens from bringing foreign currencies out of Russia. Lastly, Russia's central bank still has some foreign currency reserves and they are actively using them to prop up the Ruble.

Basically the official rate is irrelevant now because you can buy Rubles but you can't sell them (and citizens are actively forced to do this). As a result of this one way movement, the Ruble has appreciated but that exchange rate is more or less meaningless.

Also one last point is that sanctions perversely boost Russia's trade surplus. Russia is still continuining to sell oil and gas (with some price discounting but still they're able to sell it) but sanctions have dramatically cut Russian imports. So Russia's trade surplus will grow and as a result their foreign exchange reserves will grow (and their currency will stabilize). Now in a normal world this would be countered by the fact that citizens would rush to convert their currencies as a hedge against instability in Russia but as noted, Russia has imposed heavy capital controls that have more or less made currency conversion impossible.

 

Yes I was going to make that point. Here is a pretty good article describing how Russia is artificially propping up the Ruble.
https://www.nytimes.com/2022/03/30/...-recovery-economy.html?searchResultPosition=1
The ruble makes a strong showing after peace talks.

Propped up by positive expectations that were bolstered by peace talks in Istanbul and by the Russian central bank’s quick and robust measures to support it, the Russian ruble made a staggering rebound approaching its prewar value on Wednesday.

The Russian currency was trading at 83 per dollar, only two rubles away from the levels it hit on Feb. 23, one day before President Vladimir V. Putin ordered Russian troops to invade Ukraine.

The rebound ran contrary to expectations. On Sunday, President Biden said on Twitter that as a result of sanctions, “the ruble was almost immediately reduced to rubble.”

The ruble’s stronger showing is most likely driven by artificial factors and might not be a good marker that the Russian economy is improving, said Yevgeny Nadorshin, the chief economist at the PF Capital consulting company in Moscow.

“In view of sanctions and countersanctions, which limit Russia’s transborder trade and thus reduce the demand for foreign currency, we cannot say that exchange rates reflect economic realities in the country,” Mr. Nadorshin said.

Ever since Western countries imposed sanctions on Russia for invading Ukraine, Russia’s central bank has made a number of strategic moves that have further limited international trade, but prevented a catastrophic bank run and capital flight.

For instance, it ordered Russian companies to convert 80 percent of foreign currency revenues they receive under export contracts into rubles. That allowed the central bank to accumulate some hard currency as the West froze more than $300 billion worth of Russian reserves, Mr. Nadorshin said.

The country’s main financial regulator also limited the amount of foreign currency that Russians can withdraw from their bank accounts to $10,000 over the next six months; anything over that would be paid in rubles. The key interest rate was raised to 20 percent, making ruble-denominated deposits more attractive, but also making lending, including mortgages, prohibitively expensive.

Russia can live under such restrictions for a long time, Mr. Nadorshin said, but the price of that would be further isolation and long-term development.

“The Soviet Union lasted a long time,” he said, “but we know what it all ended up with.”

 

This idea that sanctions aren't working is not supported by the evidence in Russia where Russians are facing shortages;
https://www.reuters.com/world/europ...hortages-traders-divert-shipments-2022-04-01/
https://apnews.com/article/russia-u...oscow-europe-1e0c675d2e5dfe50665d97a379313aef

 

We'll see how long they can hold up. This isn't the Soviet Union where they had a closed economy (along with trade with Warsaw Pact countries) so they were naturally insulated from the West. Russia is heavily dependent on the West for most trade. It's a country that produces very little (outside of natural resources and agriculture) and as a result, it is heavily reliant on foreign trade. They can save their currency by limiting trade and keeping capital controls in place but it comes at a huge cost. Current forecasts project a 10-15% decline in GDP this year (with a further decline next year). That's basically the equivalent of wiping out 15 years of growth. Not to mention the shortages that will come as a result. All of these currency stabilization measures are simply designed to create the illusion that the sanctions aren't hurting them but they're staring at a catastrophic economic failure if things don't change.

 

The biggest problem is all the young people LEAVING Russia - they are exiting in record numbers - it will set their economy back decades....

Today Wargaming left.....the World of Tanks people.

I work with a company that had an office in St. Petersburgh, we moved all the employees to Estonia - no more business in Russia.

Happening all over the world.

Those people that leave will get exposed to the truth - they will know that Putin is lying and if they go back, it will change the dynamic forever.

DD

 

Yeah.... no.

 

Anyone that is arguing that the sanctions are not having an impact on the Russian economy is fooling themselves... it is having a pronounced, and possibly a long term impact on Russia..... the question is whether it is having a big enough impact to force the outcome that is wanted.

 

This isn't the 1920's..... Russia is in a global economy, and have an idea of how the rest of the West lives and what level of suffering that it does and doesn't deal with. The idea that the Russians will tolerate this for many years is really not likely..... Russia can try and make a more closed society, like it is in some ways in China and North Korea... but the Genie is already out of the bottle, and it isn't going back in...... hell, China can have a more closed society in some ways because of it's economic growth.... which Russia doesn't have.

 

The 3 territories are Russia's. The low-cost high-performance Ukranian refugees belong to Poland (invest there NOW). New Ukraine's economy belongs to the CIA, manufactured and transported by China (which is why China is acting this way, it is going to help Zalinsky build Ukraine). When these interests are secured, it will be over and not a day sooner.

All of these conditions have to be met simultaneously otherwise they will keep putting horror stories in our heads.

It's like clockwork, 50+ years now. You say it will be different this time. We'll see if everyone doesn't get what they came for.

 

Conspiracy theory should be your middle name.

DD

 

Ok, I hope that content-less personal attack made you feel better.

 

From her past interviews over the years, I'd count Ioffe as an actual expert on Russian current events and Putin.

TLDW: Domestic propaganda has been too effective, making it harder for Putin to find an acceptable off-ramp. Hardliners like Kadyrov on social media are criticizing negotiators on the Russian side for hinting they may drop smaller demands like making Russian an official language of Ukraine. 'If Ukraine is full of Nazis and we are winning, why should we accept anything less than total victory?'

 

What a ish show. Unless leadership is changed, long term result could be Russia eventually becoming a client state of China... Ugh.

 

I don't understand why you are even here on a USA site, you blame the USA for everything, you hide behind a pissant country like UAE and ignore it's major human rights violations - and point fingers.

You are so full of propaganda - why are you even here?

And yes, calling out your bullshit - makes me happy.

DD