The exchange rate is no longer valid. You can’t actually exchange US dollars into Russian Rubbles so to say 1R is worth 0.1$ doesn’t make sense because how can you make that comparison if you can’t actually do the conversion.
So at this point the exchange rate is just estimated but it might be much different if in theory we could actually do the exchange. Plus of course Russia is going to have to do this repair without actually having access to a large numbers of exterior markets. Again the fact that they can’t access markets that exchange rate calculations normally assume a country will have access to, messes up the calculations.
You cant exchange millions of dollars (but tbf you couldn’t do that easily in the best times), but people can exchange theirs money into euro and dollar for that rate (realistic limit is $10k/month, but there are legal ways to cricumvent that limit). To say “you cant actually exchange USD to RUB” is untrue.
I guess the argument is that if you can’t do it on a large scale, then it’s economically not that important. The market forces that would drive the price discovery of the exchange rate don’t work if you can’t trade freely.
The exchange rate is no longer valid. You can’t actually exchange US dollars into Russian Rubbles so to say 1R is worth 0.1$ doesn’t make sense because how can you make that comparison if you can’t actually do the conversion.
So at this point the exchange rate is just estimated but it might be much different if in theory we could actually do the exchange. Plus of course Russia is going to have to do this repair without actually having access to a large numbers of exterior markets. Again the fact that they can’t access markets that exchange rate calculations normally assume a country will have access to, messes up the calculations.
You’re right. How are the calculations actually done then I wonder?
You cant exchange millions of dollars (but tbf you couldn’t do that easily in the best times), but people can exchange theirs money into euro and dollar for that rate (realistic limit is $10k/month, but there are legal ways to cricumvent that limit). To say “you cant actually exchange USD to RUB” is untrue.
I guess the argument is that if you can’t do it on a large scale, then it’s economically not that important. The market forces that would drive the price discovery of the exchange rate don’t work if you can’t trade freely.
That is a valid, but still different argument. Exchange rate still exists for average Joe (or Ivan), it isn’t North Korea (yet?)