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A Good Analysis of the Ruble's Recovery

Julian Silk's picture
Adjunct Professor
  • Member since 2010
  • 281 items added with 7,659 views
  • Apr 13, 2022

There have been a number of articles posted in Energy Central predicting a recession in Germany and substantial losses for Western countries and companies in their efforts to comply with the effort to seek the removal of Russian military forces from Ukraine.  Those looking at the recovery of the ruble, to about 80 rubles per dollar, may be led to buy into these arguments.  A good new analysis of the ruble's recovery is at

This analysis is produced by an economist who is thoroughly familiar with Russia, but who is in France, and is thus not under direct control by the Putin regime.  The notion that post-Communist countries necessarily follow a market approach to the foreign exchange rate was disproved in the case of China in 2019, as in

and any argument made that Russia is not following the same path in this case will have a difficult time confronting the facts.  The discussion by JDSupra at

points out that "The Decree also expressly entitles the Central Bank of the Russian Federation’s board of directors to establish a different procedure for currency exchange for gas payments. At this time, we are unaware of any developments in terms of potential alternative currency exchange arrangements."  These payments for Russian gas through Gazprombank were not mandated prior to the invasion, and alternative currency arrangements for natural gas purchases are possible.

Julian Silk's picture
Julian Silk on Apr 13, 2022

Let me just add that it is perfectly possible to disagree with the arguments sympathetic to confronting Russia.  It will take extensive work and cooperation by the other economies to avoid major trouble, and such an effort may not be made.  My point is that it is possible to overcome the difficulties, not guaranteed, and that acquiescence to the Russian invasion may not be profitable, or warranted.  A good description of the problems, which seems unbiased, is at


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Thank Julian for the Post!
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