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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Also, why would Russia demand energy payments in rubles? Can't they just take dollars and convert them to rubles after the transaction, thereby having the same effect? What's the diff?
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If they took dollars and sold rubles, they’d destroy (further) the value of their currency. This is equivalent to being short the ruble. Normally they’d balance it out by buying imports with dollars, but they can’t because they can’t buy imports anymore (caveats apply).
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They'd be taking dollars and then selling them to buy rubles
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It’s still gonna have some kind of effect like this here, lemme think about it.
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Yeah so if you give me dollars for oil, and I buy rubles with dollars, I’m contracting the money supply unless I’m buying goods with my rubles. Would cause inflation, which iirc it actually has.
thoughts?