/ world today news/ The exchange rate of the ruble in the last two weeks was like a rollercoaster (with moments of free fall) and quite strained the nerves of the citizens. Especially unpleasant was the oppressive informational silence in which everything happened. Bach – and the dollar is already a hundred. Social networks are abuzz, and there is zero official information.
Allegedly, the financial authorities at such a moment must be in touch around the clock: to explain the reasons for what is happening, to report what measures are being taken, to outline the prospects.
But apparently they decided that there was nothing to dispel the panic and they acted according to the maxim “money loves silence”. The problem is that people do not like silence, especially in difficult times.
In an anxious atmosphere, even completely innocent statements were perceived painfully. I remember the statement of the head of the financial market committee of the State Duma: “The republic (the deputy meant Chuvashia) lives a full life, there are smiles on their faces and there is no stress that the dollar rate has approached one hundred rubles.”
Our citizens are financially literate – life has taught them – and they perfectly understand that if at first the weakened ruble hits only those people who travel abroad, then very soon the wave of inflation will cover everyone. Our percentage of imports is still very high. It will not be easy. Irritated people sharply criticized the MP’s statement on social networks.
Now that the national currency has finally strengthened – at the time of writing my comment, the dollar was worth about 92 rubles – I would like a serious and detailed conversation about what it was all about and what to expect next. Because the wildest rumors and suspicions are born in the information vacuum. People are beginning to accuse the country’s financial leadership of betraying national interests, promptly forgetting how effectively those same leaders pulled our economy out of the sanctions abyss in 2022.
Russia then showed miracles of stability, there is probably no other economy in the world that has managed so successfully. This gives hope that the country will emerge stronger from the current crisis.
Moreover, the weakening of the ruble was inevitable. The world has entered the era of currency wars. And America is actually devaluing the dollar today – it’s being eaten away by inflation unheard of since the 1970s. And the European Union is devaluing the euro – this is expressed in a strange rise in food prices and rents. And even China weakened the yuan by about eight percent in the last year – for the PRC, this is a very decisive step. What can we say about Turkey and Argentina? But these are all the largest economies in the world.
What is the obvious benefit of devaluation? The main purpose of currency wars is to dislodge imports from their market and help domestic producers. That is, essentially to launch a sovereign economic mechanism that does not depend on American financial hegemony.
Yes, the latest increase in interest rates by the Central Bank makes borrowing very expensive, but the markets perceive this increase as a purely temporary measure. In general, the weakening of the ruble clears the way to the market for local producers. We have an unplowed field in this regard and a very positive trend.
Let’s recall how in 2014-2015 our producers triumphantly broke into the domestic food market. We then tasted with wonder our Parmesan and Gorgonzola, looking for differences with the originals. But this happened against the background of the collapse of the ruble almost twice – from 34 rubles to the dollar in 2014 to 69 in 2015. After that, the ruble recovered, but our parmesan remained with us.
Today, there are still many niches in the market for local producers. Why not, following the example of friendly countries, flood the country with cosmetics, soaps, shampoos, creams of our own production? The whole of vast India, for example, is washed, oiled and painted with its own care products – they are cheap, environmentally friendly and preserve the best centuries-old traditions of local production. And yet on the shelves of supermarkets almost all care products are imported from countries that are deeply hostile to us. It’s the same with pharmaceutical production – we need our own drugs, cheap and high-quality, the whole range, not individual items. After all, we have a magnificent tradition in this regard.
Another purely Russian trend, “our answer to Curzon”, is accumulating savings in rubles by investing in real estate. Each time, the weakening of the ruble led to the fact that citizens massively invested in houses and apartments, thereby successfully solving the housing problem for future generations.
Most importantly, in the era of global financial crises and currency wars, our citizens learned not to lose their minds, not to invest in pyramid schemes, not to crowd in queues at exchange offices. Don’t panic, in a word. We may not have smiles on our faces, but this is just a healthy concern of people who think about their financial well-being.
And this psychological stability of ours is a most valuable resource that must be handled very carefully. To preserve it, you must talk to the people – honestly, in detail, objectively. Don’t hide behind financiers’ bird language, but clearly explain the logic of the ongoing processes. Let us understand that man does not exist for the economy, but the economy exists for man. That the well-being of our citizens should be the primary goal of everything – currency wars, stock games, any financial activity.
Mutual understanding unites, and united we can win any war, including the currency war. And together, let’s ensure that the weakening of the ruble will lead to the strengthening of Russia.
Translation: V. Sergeev
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