Inflation at the end of the year may reach 50-100%.
International partners are already preparing the fourth package of economic sanctions against Russia. She is becoming more and more isolated, reports the Chronicle.info with reference to 24 Channel.
We tell you what sanctions have already been imposed on Russia, and how they are more and more finishing off the economy of the aggressor every hour.
Today, the Russians are about 2 times poorer. Within a week they will conditionally win three times. If earlier their GDP was 1.4 trillion dollars, then in a day it conditionally decreased to 800 billion dollars.
Oleg Getman, Economist, Specialist of the Economic Expert Platform
The collapse of the ruble
Back in mid-February, Russians could buy and sell the dollar at a rate of about 75 rubles to the dollar. But already on Monday, February 28, the exchange rate reached almost 200 rubles. In particular, in Tinkoff Bank it was at the level of 192 rubles per dollar.
At the same time, the official rate of the central bank froze at the level of 100 rubles per dollar. It is these figures that can be seen in exchangers, but they do not have a currency. According to Oleg Getman, the Russians are in a panic – they are trying in every possible way to withdraw rubles and convert them into any other currency.
This situation will worsen, the panic of the population is already there and it will grow. And accordingly, devaluation will lead to inflation. Imported goods have risen in price by 20-30%. Inflation at the end of the year may reach 50-100%. It all depends on how the situation develops further.
In Russia, they are desperately trying to keep the ruble exchange rate:
- key rate (we call it the discount rate) doubled to 20%. The Central Bank explained that this is for the benefit of the people, because now deposits will become more profitable. But they “forgot” to add that at the key rate, the rates on loans and mortgages will also increase, and it will also become more expensive to attract investments. True, the last point may not excite the Russians, because now there are few investors who are ready to invest in Russia.
- Russian exporters are now forced sell foreign currencyreceived for their goods and services. It’s about 80% of the revenue.
But, according to the economist Hetman, such steps will only accelerate inflation even more. And no one will force exporters to sell a dollar for 100 rubles, when on the black market it costs 200 rubles. They simply will not send revenue to Russia, but will keep it abroad.
The collapse of shares of Russian companies
On Monday, not only the ruble collapsed, but also the shares of Russian companies. And it is not surprising, because the EU countries, the USA, Canada, Great Britain and other countries imposed severe sanctions on Russian banks and companies: they froze their assets abroad and banned any transactions with them.
Consequently, trading on the London stock exchanges opened with the collapse and even bankruptcy of some Russian companies:
- shares of the Russian Savings Bank collapsed by 75%;
- TCS Group (owner of Tinkoff Bank) fell by 78%;
- Gazprom – by 60%;
- NOVATEK – by 54%;
- Rosneft – by 45.5%.
But the Moscow Exchange did not open at all.
It was impossible to open it. Everyone would just try to sell all the shares of all companies. For Russia, this would be akin to the collapse in 2008 on the American stock exchange,
Oleg Getman drew an analogy.
Partly to save the situation with the ruble exchange rate could help Russia’s gold and foreign exchange reserves, which number $640 billion. There are euros, dollars, pounds sterling, yen and so on. But these assets fell under the sanctions of Ukraine’s international partners. Now the Central Bank cannot go into the market and sell the dollar to keep the rate down, because the dollar just disappeared at their behest. In the same place euro, pound sterling and some other currencies.
This is perhaps the best thing that has been done. Thanks to foreign exchange reserves, the central bank can dampen the panic in the foreign exchange market. And this is exactly what Russia was not allowed to do today, because it was precisely parts of the gold and foreign exchange reserves that could extinguish this panic today were blocked,
explains economist Oleg Getman.
Disconnecting from SWIFT
For a very long time, Ukraine fought on the diplomatic front to disconnect Russia from the SWIFT system, and, finally, it succeeded. The EU countries, the US, Canada and Japan supported this move. Now there is preparation. True, at first they can turn off not all of Russia, but individual banks.
In Russia there is an alternative system – SPNF.They started working on it even when the first proposals to turn off Russia were heard. SPNF works on the same principle as SWIFT. But it is not able to become a full-fledged alternative, since it is purely for internal use.
The main task of SWIFT is guaranteed secure transactions between all countries of the world and all banks. And that’s exactly what can’t be fixed.
– explains Oleg Getman.
Russia will be forced to throw back decades and use the old methods of sending payment documents and messages. They are slow and unreliable.
What is SWIFT
SWIFT is an international interbank system for transferring information and making payments. It is used by over 11,000 financial institutions in over 200 countries and territories to send secure payment orders. More than 300 leading banks and organizations are SWIFT users in Russia.
What to expect next
If these crushing sanctions do not stop Russia, then Europe and other countries of the world have several more trump cards in their arsenal. Chief among them – embargo on Russian oil and gas. That is, a complete ban on buying them from Russia. It is this raw material that makes up almost 50% of the country’s GDP.
There is only one way to kill this monster. European countries and preferably part of Asian countries should find other sources of supply, but they actually exist,
the economist argues.
Europe can buy oil from Asia and gas from the US. The oil embargo will not only finish off Russia economically, but also rid Europe of Russian influence. Recall that President Zelensky in his addresses actively asks the world to take such a step.
And the world seems to be listening. The German chancellor has already stated that his the country will refuse Russian gas. It is important to understand that it is Germany that is the most dependent European state on Russian energy resources.
What sanctions were imposed on Russia: briefly
- Blocking technology exports, which will limit Russia’s ability to develop the military and aerospace sectors;
- Sanctions on the largest Russian banks;
- Sanctions against the elite, including against Putin and Lavrov;
- Sanctions against the largest companies and the government: they cannot attract investments abroad;
- Frozen 40% of gold and foreign exchange reserves;
- Any transactions with the Central Bank are prohibited.