The Bank of Russia hiked interest rates by a higher than expected 200 basis points to 15% on Friday, raising borrowing costs for the fourth meeting running in response to a weak rouble, stubborn inflation and increasing budget spending.
Very interesting IMO. A 2% increase from 13 to 15% is a big deal for the economy, and it shows the Russian Ruble and economy is pressed. Especially since the bank also states that this will NOT return inflation to its 4% target.
For comparison the EU central bank decided to NOT increase the interest rate at this time, because inflation is decreasing, keeping the EU leading interest rate at 4%.
Back in spring we first heard how Russian budgets were blowing up, and according to what we have heard through the year, Russia would probably burn through the war chest before the end of the year. A war chest Putin has spend more than a decade building.
So what we see here, may be the signs confirming, that soon the economy will begin to really hurt from this war and the sanctions.
Unfortunately Russia has had some very skilled people regulating their economy extremely well. But they can only do so much.
This is important IMO, because the Russian ability to wage war will decline together with a declining economy.
Very interesting IMO. A 2% increase from 13 to 15% is a big deal for the economy, and it shows the Russian Ruble and economy is pressed. Especially since the bank also states that this will NOT return inflation to its 4% target.
For comparison the EU central bank decided to NOT increase the interest rate at this time, because inflation is decreasing, keeping the EU leading interest rate at 4%.
Back in spring we first heard how Russian budgets were blowing up, and according to what we have heard through the year, Russia would probably burn through the war chest before the end of the year. A war chest Putin has spend more than a decade building.
So what we see here, may be the signs confirming, that soon the economy will begin to really hurt from this war and the sanctions.
Unfortunately Russia has had some very skilled people regulating their economy extremely well. But they can only do so much.
This is important IMO, because the Russian ability to wage war will decline together with a declining economy.