Overview

• The ruble has dropped to its lowest value since March 2022, trading at over 109 to the U.S. dollar after hitting 114 earlier this week.
• U.S. sanctions targeting Gazprombank, a key conduit for Russia's energy payments, have exacerbated the currency's decline by restricting access to global financial markets.
• Russia's central bank raised interest rates to 21% to combat inflation, which reached 8.5% officially but is perceived to be much higher by consumers.
• The devalued ruble benefits Russia's export revenues but increases the cost of imports, straining consumer purchasing power and driving up prices for essential goods.
• Analysts warn that the combination of military spending, falling oil prices, and sanctions could further destabilize the Russian economy in the coming months.