Russian Rouble Drops Amid US Sanctions

Russian President Vladimir Putin downplayed concerns regarding the recent decline of the rouble, attributing fluctuations to seasonal factors and budget payments, while acknowledging the intervention of the central bank to stabilize the currency. The rouble fell to 114 against the dollar, its lowest level since March 2022, following new U.S. sanctions on Gazprombank, which triggered panic buying on the forex market. Analysts warn that the rouble's significant depreciation—over 24% since August—could lead to heightened inflation and economic instability, with the central bank raising interest rates to a record 21% in an attempt to control inflation, which currently exceeds its 4% target. The situation is exacerbated by geopolitical tensions, particularly the ongoing conflict in Ukraine, leading to fears of a currency crisis. Kremlin officials, including spokesperson Dmitry Peskov, have attempted to reassure the public, asserting that the ruble's decline won't directly impact ordinary citizens. However, the historical significance of the rouble's value against the dollar invokes fears of financial instability reminiscent of past economic crises in Russia.