> But they will not burn foreign reserves to zero
No, of course not. But it's clear they've burned through enough that they've given up trying to prop up the Ruble, as they did in 2022.
No, of course not. But it's clear they've burned through enough that they've given up trying to prop up the Ruble, as they did in 2022.
There's no advantage for them to have the Ruble so weak because they absolutely want to import Chinese and Western products, namely technology, to fund their war machine. Even against the Yuan, the value of the Ruble has nearly halved since June 2022. That's not good for a nation that needs to import things...
The fact is, they do not target exchange rates in their policy, only inflation. Their trade balance with China is positive (unlike USA), so yuan reserves are growing and they have no problem to buy Chinese goods. The weakness of ruble has nothing to do with it.
This is false. I don’t know where you have got this, when all information is public and easily available. Here’s how the official exchange rate us determined:
https://cbr.ru/Content/Document/File/162004/metod_6290-u.pdf
They just collect the data on OTC transactions from banks. The only way for Russian central bank to influence the exchange rate is to sell/buy and they do it only to stabilize the market when volatility is high. They do not have exchange rate targets and do not enforce specific rates in transactions.