Sunday, 29 May 2022

In this respect, although stealing an enemy’s wealth for its own sake is not uncommon in war, this measure was intended to diminish Moscow’s ability to fund its campaign in Ukraine, bring down the ruble’s value, undermine the ability to implement monetary policy, trigger hyperinflation, provoke a credit crunch, prompt the collapse of the Russian banking system, and stimulate the evaporation of savings. Moreover, it was expected that ‒ along with other Western retaliatory actions ‒ this could lead to regime change in Moscow. Although it is unclear if all the desired outcomes will be achieved, the first effects of this heavy blow materialized in a speedy way. When the Russian “special military operation” was launched on February 24, the exchange rate was 81.31 rubles per dollar and, by March 7, one dollar was worth 142.78 rubles (a 43 % depreciation in under a couple of weeks). In the words of President Biden himself, the ruble was being reduced to rubble