My memories tell me decreasing currency can also be good in that it makes your country’s goods more competiive and increase foreign income. So why is RUB going down so bad to Russia aside from falling oil prices?
What do they export besides dollar denominated oil?
And how does this explain why the fall of RUB is bad for Russian economy?
If they sell stuff at dollar and bring back to Russia after converting to RUB wouldn’t they be better off if RUB fell?
What do they export, exactly?
Presumably there’s a fair share of arms being exported. Arms is the world’s second largest global export industry (after illegal drugs, I believe).
sanctions on buying russian stuff?
Arms.
They are one of the largest arms exporters in the world and have a monopoly on the market of the largest arms importer in the world. Admittedly as India and China move towards indegenous manufacturing of their requirements there will only be so much you can sell to countries like Venezuela.
And what % of their GDP is arms? I tried finding a breakdown and can’t.
Okay but if they are selling their weapons to other countries say China. But as RUB decreases, wouldn’t their sales be greater when converted to RUB from Yuan? This is good news for Russia isn’t it?
RUB going down is bad, because
a) it is a consequence of bad things happening to exports, so an “indicator”
b) more expensive for them to buy stuff they need
c) while exports are more attractive, if your main export is oil (which you’re selling less of), then the net impact may be negative.
This is normal. Nothing to worry about. Widening the band is a step in the right direction. Free float is even better.
/russias-banking-giants-suddenly-look-vulnerable-from-sanctions