Russia is testing a digital ruble to try to circumvent US and European sanctions.
The planned timeline is for regular Russian people and businesses to use the central bank digital currency at their own request starting 2025, said Olga Skorobogatova, first deputy governor of the Bank of Russia in a statement.
The Bank of Russia on Thursday halted purchases of foreign currency for the remainder of the year.
Oil revenues are down as Russia has to sell oil at a discount to China and other buyers. The oil embargo means Russian oil has less demand and does not get the world price. On average, China pays $7 less per barrel for Russian crude oil than it pays for products from other countries. Western countries now have a price cap of $60 per barrel for Russian oil. Oil prices as of August 11, 2023 are about $83-89 per barrel depending on the type of oil.
Political uncertainty like the Wagner Group / Yevgeny V. Prigozhin almost coup has prompted Russian Oligarchs to move money into foreign accounts.
Russia is running a budget deficit of about 8 trillion rubles per year. There was a 3.4 trillion ruble deficit in the first 6 months. Russia is spending over $100 billion per year on its military with the Ukraine war.
In the first quarter of 2023, the Russian Finance Ministry said the deficit was due to shrinking energy revenues (-52%) and increasing expenditures (+26%), partly due to the Ukraine offensive. Russia claims its GDP shrank 1.9% in the first quarter.
Russia claims its inflation is 5-6% per year.
The collapse of the Russian Ruble by 25% since the beginning of the year means Russia’s economy in US dollar terms is less. However, Russia’s economy is dependent upon oil and gas sales which mainly trade in US dollars.
Brian Wang is a Futurist Thought Leader and a popular Science blogger with 1 million readers per month. His blog Nextbigfuture.com is ranked #1 Science News Blog. It covers many disruptive technology and trends including Space, Robotics, Artificial Intelligence, Medicine, Anti-aging Biotechnology, and Nanotechnology.
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