In response, the Central Bank of Russia (CBR) suspended foreign currency purchases for the rest of 2024, temporarily lifting the ruble to 110. President Vladimir Putin downplayed the crisis, citing seasonal factors, oil price instability, and budgetary pressures. Kremlin spokesperson Dmitry Peskov echoed this sentiment, claiming that ruble-paid wages shield ordinary Russians from significant impact.<\/p>\n
Despite these assurances, experts warn of worsening inflation and economic stagnation. With interest rates at 21%, the CBR struggles to rein in inflation, which hit 8.5% in October, driving up prices for essentials like butter and potatoes. Meanwhile, new U.S. sanctions targeting Gazprombank, Russia\u2019s third-largest bank, have further isolated the economy by restricting energy-related transactions involving U.S. institutions.<\/p>\n
The government\u2019s war-focused spending continues to strain resources, prioritizing military production over consumer goods. While Putin denies a trade-off, rising production costs and stagnant wages tell a different story. Labor shortages and disrupted supply chains are compounding the strain, leaving the broader economy under immense pressure.<\/p>\n