To be clear it is not hold in $, but in RMB, gold and rubel. Before the war in held $174billion, so a massive decrease.
They can, but they are already dealing with high inflation and extremely high federal interest rates to try to stamp it down. Printing your way out of the problem will likely produce a larger problem.
Putin will probably go for it rather than admit he made a horrid choice two years ago.
high inflation
goes to look
It’s at 9.1% as of last month. That’s way up from around 5.1% last year, but…it’s definitely rising quickly, and it’d be very high for folks here in the US, but it’s not that high relative to what Russia has done in the past.
https://tradingeconomics.com/russia/inflation-cpi
It was at something like 17% in early 2022, 16% in 2015.
And like 2,300% in December 1992, though I would assume – hope – that the Kremlin wouldn’t try to intentionally induce a situation like that with the aim of prolonging the war.
Yeah, it certainly isn’t untenable in Russia right now. The main issue is that they are running out of levers to pull, so conditions that exasperate the issue don’t have solid counter-balancing options.
Two solid levers are to defend the currency (requires spending forex reserves to buy up rubles) and raising central bank interest rates. We see the reserves are drawing down in OP’s post and the central bank rates are already at 18% (compared to ~5.5% in the US). The high interest rates increasingly handycap your economy as you push them up. At 18%, it is already nearing credit card levels of interest simply to finance safe loans.
Things aren’t dire for Russia today, but they are getting closer and closer to a situation they may not be able to pull out of in the future.
