The value of the Russian currency, the ruble, has recovered to pre-Ukraine levels. Questions have been raised as to whether Western economic sanctions against Russia are effective. Some observers say that the value of the ruble will plunge again in the long run as Russia’s intervention to defend against the currency’s depreciation is limited.
The European Union (EU) countries’ failure to impose an immediate ban on imports of Russian energy is evaluated as a “penalty hole.” The EU relies on Russia for 40 percent of its natural gas imports, raising concerns about the embargo. The United States has already banned imports of Russian oil and natural gas, and the United Kingdom will gradually ban them by the end of this year, AP said. “But it will not have a meaningful impact unless the EU follows this decision.”
Ukrainian President Vladimir Zelensky also urged tougher sanctions against Russia. In a video address to the Norwegian Parliament, he said, “The only means to urge peace in Russia is sanctions,” adding, “The stronger the sanctions, the faster we will restore peace.”
The value of the ruble is recovered, but many predict that it will fall in the long run. Considering the interest burden on borrowers, the Russian central bank cannot continue to raise its key interest rate. At some point, individuals and companies will develop a way to bypass Russian capital control by moving funds at a small amount, AP said. Economists also said, “The ruble is expected to be weighed down in the end because various sanctions are slowing the Russian economy.”
