Foreign currency rates provide a health reading on a country’s economy. This is one reason Vladimir Putin wants western Europe to pay for Russian gas in roubles, not euros. Germany refuses to participate in this stealth currency support operation. On Wednesday Europe’s biggest consumer of Russian gas began preparing to ration demand instead.
Like any niche market nationalist, Putin must despise his country’s dependence on foreign currencies. His fightback has worked short term.
A barrage of sanctions by G7 countries against Russia and prominent Russians initially pushed the rouble down by as much as 40 per cent. A directive for exporters, including commodity producers, to convert 80 per cent of inbound hard currency payments into roubles calmed nerves. The rouble has recovered most of its losses versus the euro and dollar since the invasion.