Russian Rouble Plummets, Kremlin Points to Loose Monetary Policy
The Russian rouble has hit its weakest point in almost 17 months, sliding past 101 per U.S. dollar. The Kremlin blames the rouble's 30% year-to-date slump on loose monetary policy and wants a strong rouble, while President Putin's economic adviser criticizes the central bank for its soft monetary policy. The Bank of Russia, which hiked rates in July, sees no financial stability risks from the rouble's weakening and suggests a rate hike may be possible soon. The rouble's decline is attributed to factors such as Russia's shrinking current account surplus, lower energy receipts, higher import costs due to sanctions, and capital flight. To stabilize the rouble, Russia could reintroduce tougher capital controls or raise interest rates, but these measures have their own drawbacks.