Title: The fall of the Russian rouble: an economic crisis that threatens the standard of living
Introduction :
The economic situation in Russia is causing serious concern, as the ruble continues to fall against the dollar and the euro. Since March 2022, when the Russian currency had already experienced a tumble following tensions with Ukraine, the ruble had not experienced such a level of weakness. This situation worries many Russian citizens, who fear for their standard of living, due to rising inflation, Western sanctions and the financial costs linked to the Ukrainian conflict. This article examines the factors that contribute to the fall of the ruble and the consequences for the Russian population.
An economy weakened by inflation and Western sanctions:
The last few weeks in Russia have been marked by the return of inflation, with an increase of 4.3% in July. This price increase is directly linked to the fall of the national currency, which has led to a significant drop in income from the sale of hydrocarbons. In 2022, inflation had reached record levels, exceeding 17% in the spring, which had already affected the purchasing power of Russians. Faced with this situation, the Russian Central Bank was forced to raise its key rate to 8.5% in an attempt to control the rise in prices.
Western sanctions also put an additional burden on the Russian economy. Since the annexation of Crimea in 2014, numerous economic sanctions have been imposed by Western countries, which have restricted access to financial markets and technologies for many Russian companies. This situation has a direct impact on the value of the ruble and makes the country’s economy even more precarious.
The Ukrainian conflict: a financial burden for Russia:
The growing financial cost of the Ukrainian conflict is another factor contributing to the depreciation of the rouble. Russia is deploying considerable resources to support the separatists in eastern Ukraine, both militarily and financially. This situation has an impact on the Russian state budget, which now has to deal with significant expenditure to cover conflict-related costs, including pensions for veterans, reconstruction of infrastructure and humanitarian aid. The weakening of the ruble allows the Russian state to bail out its coffers, but this is done at the expense of the purchasing power of Russian citizens.
Consequences on the standard of living of Russians:
The falling ruble and rising inflation have a direct impact on the standard of living of Russians. The prices of basic necessities are rising, and many households are seeing their incomes shrink. This situation makes access to certain goods and services more difficult, especially for the most vulnerable populations.. Additionally, economic uncertainty is causing many Russians to limit their spending, which has a detrimental effect on the country’s overall economic growth.
Conclusion :
The fall of the Russian ruble and the resulting economic problems jeopardize the standard of living of Russian citizens. Rising inflation, Western sanctions and financial costs related to the Ukrainian conflict are all contributing factors to this economic crisis. It is therefore crucial that the Russian authorities take measures to stabilize the national currency and revive the economy