Energy-Driven Ruble Rebound Won’t Rescue Russia

Energy-Driven Ruble Rebound Won’t Rescue Russia

Russian President Vladimir Putin speaks during a meeting of the Russia the Land of Opportunity ... [+] Supervisory Board at the Kremlin, in Moscow, Russia, Wednesday, April 20, 2022. (Mikhail Klimentyev, Sputnik, Kremlin Pool Photo via AP) On Monday, President Vladimir Putin claimed that Western sanctions imposed against Russia have failed in a televised address. He said the strategy of economic blitzkrieg did not provoke an immediate meltdown of the economy as expected. Instead, he touted the strength of the ruble, Russia's currency. Shortly after Russia invaded Ukraine, the West imposed unprecedented sanctions on the country— primarily targeting its Central Bank reserves including its sovereign wealth fund. The ruble plummeted immediately, dropping in value more than 40%, leading many experts to predict the currency was in freefall. However, it returned close to its pre-war exchange rate against the American dollar after a month of war. But while the ruble did defy expectations due to Russia's currency manipulation, its recovery is a red herring. Energy sales partly explain the dramatic rebound. Moscow receives 40% of its budget revenues from energy exports. Energy sales that bring an influx of foreign currency are a lifeline for Russia, which now lacks access to global