Russia - the rouble is weak for LT reasons

Interesting FT piece today on the weak rouble but it skirts around the issue:

https://www.ft.com/content/2feb14af-bd59-4d22-9731-ab90f73eee93

How about just spelling it out - the rouble is weaker because of Putin’s failed invasion of Ukraine and sanctions. There is some dribble in this article suggesting the weak rouble does not reflect long term fundamentals - of course it does. It’s not as though the long term outlook is any better as long as Putin remains in power and continues his disastrous policies.

This year looks to be much more difficult for the Russia economy as:

* Sanctions crimp energy and commodity receipts - the oil price cap is really hurting. And you can see it in both budget and trade data where energy related receipts are lower by 40-50% YOY.

* Defence spending and increased social spending to keep war veterans and their families quiet will massively boost spending. Putin will have to make guns versus butter choices.

* A weaker rouble - needed to help keep the rouble value of oil revenues elevated to keep the budget in check will spur inflation and resulting higher policy rates will crimp real GDP growth.

Sanctions will work over the longer term to depress the Russian economy limiting his ability to rebuild the Russian military. It is essential they remain in place.