Russia’s Central Bank set the ruble’s official exchange rate at over 100 to the dollar for Wednesday, marking the first time the currency has slipped pass the symbolic threshold in more than a year.
Wednesday’s rate, pegged at 100.03 rubles per dollar, reflects a nearly 19% devaluation since Ukraine’s surprise incursion into Russia’s Kursk region on Aug. 6. The ruble’s latest drop follows President Vladimir Putin’s decision to lower Moscow’s nuclear strike threshold after the U.S. gave Kyiv permission to fire long-range missiles at targets inside Russia.
Inflation is being driven by the rapid rise in wages as the Kremlin pours billions into military industries and sends millions of men to fight in Ukraine. In the middle of a war, companies outside the defense sector can’t compete for workers without paying much higher wages. In turn, they charge higher prices. So the spiral continues.
