Here's the US to Ruble chart since Jan 98, when it was around 7. In Aug of 1998 it shot up from 7 to 23. What happened then?
Posted on 12/10/2003 6:21:29 PM PST by Lessismore
MOSCOW - Today, the real value of the US dollar is RUR 11, reported the Economic Expert Group, an analytical center of the Finance Ministry. According to the Izvestia newspaper, the Central Bank announced its decision to focus on the curbing of inflation. Accordingly, it will pay less attention to supporting the dollar.
People calculate their losses since the start of the year, and they realize how much they have lost. They invest in real estate, in order to sell later. The prospect that the Central Bank will abandon its exchange rate policy frightens not only ordinary citizens but also exporters, the newspaper says.
Everyone in our country knows the importance of the dollar’s exchange rate, and watches it carefully. This figure is simple but deceptive. It presents practical interest only for those who are going to spend their dollars in one country – the United States. Prices almost do not rise there, and it means that the dollars of Russian citizens retain their purchasing power.
In all other cases, the situation is completely different. It is most sad for the absolute majority of Russian people who hold dollars – people who earn in dollars and spend them on living expenses. Such people have lost 15.5 percent of their incomes this year, or about one-sixth of their earnings.
It is exactly by how much the dollar’s buying power decreased in Russia, in the estimation of the Central Bank. In other words, if you spent $100 on the New Year celebration last year, you will have to spend $115 this year. As for your New Year expenses next year, it is better not to think about them.
“According to our estimates, if the Central Bank did not regulate the ruble’s exchange rate, the dollar’s consumer purchasing power would be about RUR 11 now,” Yevsey Gurvich, the head of the Economic Expert Group, was quoted as saying by the Izvestia. The real value of the US dollar concerns both citizens who still keep their savings in dollars and exporters, whose business also depends on the ruble/dollar exchange rate.
It has long been no secret that the official exchange rate of the dollar is a far cry from its real value. When Viktor Gerashchenko, the former chairman of the Central Bank, says that the real price of the dollar is RUR 15-16, according to independent analysts, his opinion could be shrugged off because of the banker’s eccentricity and his ‘free’ status. But when Mr. Gurevich, heading the team of the Finance Ministry’s macroeconomists, puts the real value of the dollar at RUR 11, this opinion cannot be simply shrugged off, the newspaper concludes.
Interesting, when I was there last winter a dollar was about 33-35 rubles. He's saying the dollar is overvalued by a factor of about 3.
Richard W.
Depends on what they're attempting to do. To devalue debt they need to devalue the dollar. Just one of the games they play to make sure the correct people prosper.
Greenie and the whole Federal noReserve System need to be retired.
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