Russia's economy under pressure: ruble collapse and impending bankruptcies!

Russia's economy under pressure: ruble collapse and impending bankruptcies!

The economic situation in Russia remains tense, while the ruble remains under pressure. Recently, the Russian Central Bank increased its key interest rate from 8.5 to 12.0 percent in response to the dramatic fall in the ruble. This measure was taken to ensure price stability, but inflation has already risen to around 9 percent. Experts believe that the interest rate hike will not solve the fundamental problems of the ruble's decline, pointing to a real "collapse" of the Russian currency, as tagesschau.de reported.

Causes of the fall of the ruble

The reasons for the dramatic fall in the value of the ruble are complex. On the one hand, Russia's trade balance has fallen sharply due to falling oil and gas prices, which is depressing exports. At the same time, imports are increasing again, which has significantly reduced the trade surplus. The central bank estimates that the trade surplus will fall by almost 70 percent this year. In addition, Western sanctions, particularly restrictions on oil sales, have contributed to the aggravation of the situation world.de explained.

Despite the interest rate hike, economic uncertainty remains in Russia. Many entrepreneurs consider high interest rates to be the biggest risk to their business, while a significant part of their profits go to interest on loans. At the same time, increasing capital flight is also drawing capital out of the country, further weakening the ruble. The Russian Central Bank is optimistic and predicts weak economic growth of just 0.5 to 1.5 percent for 2025, while inflation and uncertainty among the population continue to rise.