I don’t get why the ruble is back to its pre-war level. I don’t necessarily think it matters but I’m just confused because presumably a lot of foreign buyers of Russian goods and services who would bid up the ruble’s price are now cut off.
ELI5 please
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My best guess is it’s arbitrage. The ruble was always backed by oil and commodities. Initial shock reduced demand for these due to sanctions. But market expects foreign buyers (China india etc) to do sanctions arbitrage or just shift demand to their commodities
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This is what I thought!! But now I conveniently cannot find the post where I talked about it!!
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I’m abusing the term arbitrage here I think. But it’s close enough. “Sanctions arb” seems correct.
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It just inevitably makes sense to me that the effect of sanctions will be to redirect commodity flows but not necessarily the delivery of commodities themselves
Where India might have been 50/50 russian/west for oil, they might now be 90/10, but Western sellers who lose...
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