### Summary
The Russian stock market's recent gains are a facade and the country's economy is in decline, according to Yale researchers. Russia's frozen foreign assets and the depreciation of the ruble have artificially inflated stock market profits. Additionally, the economy is suffering from a loss of confidence, with people and money fleeing to neighboring countries.
### Facts
- 📉 The Russian stock market's recent gains are an illusion, masking the true state of the country's struggling economy.
- 🧊 Russia has frozen inflows and outflows of foreign assets, preventing investors from cashing out and propping up the stock market.
- 💸 The depreciation of the ruble has artificially inflated the value of Russian stocks, as the country's commodities are sold in foreign currencies.
- 💼 Workers, academics, and oligarchs are leaving Russia, taking with them technical and intellectual capital essential to the country's economy.
- 💔 Trust in President Vladimir Putin and confidence in the Russian economy have eroded, leading to a lack of domestic and foreign investment.
- 🌍 Neighboring countries like Armenia, Georgia, and Kyrgyzstan have become destinations for Russian money and talent fleeing the country.
- 📉 Experts warn that Russia's economy could continue to decline and the country may even become a failed state if the costly war in Ukraine persists.
### Summary
Russia's currency, the ruble, has plunged to a 16-month low, leading to surging prices of sushi due to the country's economic challenges and rift with the West.
### Facts
- 💰 Russia's currency, the ruble, hit a 16-month low last week, as the country's current account suffers from Western sanctions.
- 🍣 Local prices of sushi in Russia are expected to surge by as much as 30% in the coming weeks due to the weakened ruble and strained relations with the West.
- 📈 Russia's official inflation rate reached a five-month high of 4.3% in July, but some economists estimate it to be over 60%.
- 🍱 Restaurateurs in Russia are already facing increased costs of sushi ingredients, such as rice, fish, and seaweed, which are imported and dependent on the dollar exchange rate.
- 💸 The embattled ruble sank past 100 to the dollar, prompting the Russian central bank to raise interest rates significantly.
- 📉 Capital outflows, reduced reliance on Russian oil by European nations, and falling export revenues have added to Russia's economic challenges.
- 🇷🇺 President Vladimir Putin held an emergency meeting to discuss measures for stabilizing the exchange rate, including export restrictions and limits on foreign currency movement.
The Russian ruble's recent volatility and decline in value reveals the underlying struggle of funding the military without damaging the national currency or causing inflation, while the Kremlin's efforts to stabilize the economy in the short term may not prevent long-term economic decline and stress on the ruble.
Sberbank CEO Herman Gref believes that the Russian ruble is undervalued and should be trading at 80 to 85 rubles to the US dollar, contrary to Russian President Putin's reassurances of economic stability.
The Russian rouble weakened past 100 to the dollar due to foreign currency outflows and a shrinking current account surplus, but recovered slightly in early trade on Tuesday.
The Russian rouble has experienced a significant decline in value this year, decreasing almost 30% against the US dollar, leading to concerns of further depreciation and economic challenges for the country.
Russia's economy is being increasingly structured around war, with nearly one-third of the country's spending next year devoted to defense, redirecting funds from sectors like health care and education; however, the economic impacts of the war, including inflation and a weakened ruble, are causing concerns for citizens and the government alike.
Russia has reintroduced some capital controls in an effort to stabilize the ruble as the cost of war with Ukraine continues to impact the economy, with the currency gaining 3.4% after Moscow announced exporters would be forced to convert foreign revenues into rubles. These controls are similar to those implemented in 2022 after the start of the conflict, where Russia ordered exporters to swap 80% of their foreign currency revenues for rubles and banned residents from making bank transfers outside of Russia. The ruble has lost over a third of its value against the dollar this year due to the war and declining revenue from the energy industry.
