Ruble Plunges to New Lows, Russians Told Not to Panic

Ruble Plunges to New Lows, Russians Told Not to Panic

Russian authorities told people not to panic on Tuesday as the battered ruble plunged to record lows, floored by tensions with the West over Ukraine, new sanctions and falling oil prices.

  • The national currency fell to a record level of 38.82 rubles per dollar after weakening on Monday to below 38 against the dollar for the first time.And it broke through the symbolic level of 50 rubles per euro for the first time for several months.

    The ruble has slumped as investors fret about the impact of ever more stringent Western sanctions on the economy, which is already teetering on the verge of recession.

    Ordinary Russians said they were concerned that a weaker ruble would drive up inflation and make foreign trips and foreign-currency-denominated purchases an increasingly unaffordable luxury.

    Deputy foreign minister Alexei Moiseyev sought to put on a brave face, saying authorities were taking steps to curb inflation.

    “Don’t panic,” he said on Tuesday.

    The euro was worth 50.11 rubles at 0754 GMT on Tuesday, almost one ruble more than its value the day before.

    The Russian currency is still worth slightly more than at its lowest point in spring of 50.22 rubles to the euro after Russia’s annexation of Crimea in March.

    Since the start of September, the dollar has gone up 1.70 rubles in value.  Read More:

This severe devaluation is very common for fiat currencies, and almost all currencies today are fiat, have no backing.  The US Dollar today is also a fiat currency.  In 1960 a 1960 quarter would buy a gallon of gas.  Today that same silver quarter will buy more than a gallon of gas.  The USD has lost over 90% of its value during the working years of the Baby Boom generation.

In regard to the advice “not to panic”, what is the track record?   Not good.  I have 20 million Bolivian Pesos.  Paid $60 for them over twenty years ago and they are now worth less than one dollar.

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