What is the reason for the rapid collapse of the ruble: British intelligence has given an answer

What is the reason for the rapid collapse of the ruble: British intelligence has given an answer Dmitry Usik

In November 2024, the Russian ruble fell to a record low against the dollar since the invasion of Ukraine in 2022. American sanctions are said to be the reason.

This was reported by Channel 24 with reference to the British Ministry of Defense.

How the decision to keep the interest rate will affect Russia

Thus, on December 20, the Central Bank of Russia decided to keep interest rates at 21%, which indicates a departure from decisions to combat inflation. In October, the Central Bank raised interest rates from 19% to 21%, the highest since the start of the full-scale invasion.

As British intelligence notes, criticism of high interest rates is growing among Russian businesses. However, inflationary pressures are also likely to be mounting, in particular due to the record depreciation of the rouble.

“The fall in the rouble's value was almost certainly triggered by the announcement of sanctions against Gazprombank, followed by the publication of economic statistics, which points to prolonged overheating of the Russian economy, the UK Ministry of Defence writes.

The Russian Central Bank has announced that it will stop buying foreign currency until 2025. However, the rouble remained above 100 to the dollar until 20 December 2024, leading to widespread market expectations of another interest rate hike. According to UK intelligence, the decision to keep interest rates at current levels is likely to exacerbate imbalances in the economy due to the inflationary effects of depreciation, labour shortages and high government expenses.