U.S. sanctions on Russia have failed to deliver a significant impact on Russia’s ability to wage war in Ukraine. President Joe Biden assured us, just one month after Russia invaded that his plan to punish Russia with economic sanctions would reduce the ruble to rubble. He didn’t use that phrasing however, too many R sounds for him to pronounce sequentially.
As of today, Russia is officially the most sanctioned country on the face of the planet, per U.S. officials. There has been some instability in the price of the ruble, but overall the currency has bounced back due to clever management and shrewd fiscal policy. Say what you like about Putin and the Russians, but the sanctions aren’t stopping them.
Currently trading around ₽75 to $1, the ruble is about where it was shortly before the war began. Russia did have an economic contraction of about 2.2% in 2022, per the IMF, though that defied disastrous predictions by White House officials of a collapse of 15% or more according to their experts.
The IMF is also predicting the Russians will outperform the Brits in 2023, big sponsors of Ukraine in the conflict.
Energy exports, price controls, and trade with other nations have allowed Russia to maintain its stability and forced it to adapt. Starbucks has been replaced by Stars Coffee, for example. McDonald’s has also been replaced by Russian owned imitations.
The sanctions continue to punish Russian businesses abroad with many having their assets frozen. The SWIFT system for processing financial transactions including credit card and bank transfers has also barred Russians from using its services. Energy exports like oil and natural gas had their prices capped, but critics have admitted that price was too high to impact Russia negatively.
There are multiple countries that side with Russia in the conflict and continue to trade with them including, China, Brazil, Turkey, and India.
Biden announced more sanctions coming soon during his European PR tour to Ukraine and Poland on Tuesday, February 21st.
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