Russia’s ruble woes serious but not catastrophic

Significance After slumping earlier in the year, imports have grown in recent months. Alongside relatively stable exports, this caused a gradual weakening of the ruble. New US sanctions on Russian banks exacerbated an already deteriorating situation, causing the ruble to slump to its weakest level since spring 2022. Impacts Higher prices for imported products will add to inflationary pressures. A weaker ruble will boost federal revenues but raise inflation-indexed expenditure. The ruble's weakness could provoke short-term surges in consumer spending, undermining central bank efforts to cool domestic demand.