{"id":115020,"date":"2025-05-19T18:38:08","date_gmt":"2025-05-19T18:38:08","guid":{"rendered":"https:\/\/www.europesays.com\/uk\/115020\/"},"modified":"2025-05-19T18:38:08","modified_gmt":"2025-05-19T18:38:08","slug":"russian-economy-in-meltdown-as-moscow-issues-embarrassing-rouble-update-world-news","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/uk\/115020\/","title":{"rendered":"Russian economy in meltdown as Moscow issues embarrassing rouble update | World | News"},"content":{"rendered":"

Russia could face a run on the rouble, leading to higher inflation and adding to the country’s economic woes. Consumers and businesses have been hit by a double whammy of spiralling inflation and high interest rates<\/a>.<\/p>\n

Last year Russia<\/a>‘s Central Bank was forced to hike its key interest rate<\/a> to 21% – the highest level in some 20 years. The move was in response to growing inflation, which in April had hit 10.2% – up from 9.5%. However, food prices have surged well above the official inflation rate, in a bitter blow for shoppers.<\/p>\n

Over the last year, the cost of milk and apples has gone up by approximately 20%, cucumbers by 22%, beetroot by 32%, butter by 35%, cabbages by 42%, onions by 46%, and potatoes by a whopping 90%.<\/p>\n

Many businesses are also struggling to pay back bank loans, and are facing a fight for their survival.<\/p>\n

Sergey Chemezov, the head of Russia<\/a>‘s defence conglomerate Rostec and a former KGB colleague of Putin, warned that hundreds of companies could go bust.<\/p>\n

Now the Kremlin is facing a potential devaluation in the rouble, which could have negative consequences for the economy.<\/p>\n

The rouble has surged about 40% against the dollar to around 80 this year.<\/p>\n

Analysts widely see it as overvalued and cite a failure of Ukraine<\/a> peace talks, a possible interest rate<\/a> cut and further falls in oil prices as likely triggers for a slide.<\/p>\n

A Kremlin source told Reuters that if the rouble fell to 110-120 to the dollar, this would cause a further hike in inflation, although it would help maximise oil revenues.<\/p>\n

Experts believe that the most likely cause for a run on the national currency would be a failure of the upcoming peace talks to secure a lasting ceasefire in Ukraine<\/a>.<\/p>\n

Economist Evgeny Kogan said the rouble’s real exchange rate, adjusted for inflation, was 12% stronger than in 2019 and 14.9% stronger than the 10-year average<\/p>\n

“Russian and international capital have entered Russia<\/a> hoping that negotiations will advance and sanctions, especially financial ones, will be eased,” he said.<\/p>\n

“If these hopes are not realised, this capital will quickly turn around and leave.”<\/p>\n","protected":false},"excerpt":{"rendered":"Russia could face a run on the rouble, leading to higher inflation and adding to the country’s economic…\n","protected":false},"author":2,"featured_media":115021,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3090],"tags":[51,1700,660,332,16491,29402,51899,16,657,15,333],"class_list":{"0":"post-115020","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-business","9":"tag-economy","10":"tag-kremlin","11":"tag-russia","12":"tag-russia-inflation","13":"tag-russia-interest-rates","14":"tag-russia-rouble","15":"tag-uk","16":"tag-ukraine","17":"tag-united-kingdom","18":"tag-vladimir-putin"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/114535956719749989","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/115020","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=115020"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/115020\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/115021"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=115020"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=115020"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=115020"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}