Is Russia on the verge of financial collapse?

The nation posted a current-account surplus of $5.4 billion for the April-June quarter, which marks a 93% plunge from a record $76.7 billion in the same period last year, Bank of Russia data shows. That’s also the smallest excess since the third quarter of 2020.

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It shows the heavy blow that Western economic sanctions — imposed on the Kremlin in response to its war on Ukraine — have dealt to the country’s economy by squeezing its energy exports.

The worsening trade dynamics are also reflected in the plunging fortunes of the ruble. The Russian currency tumbled to a 15-month low of about 94.48 for each dollar earlier in July, hit hard by the country’s weakening terms of trade.

[It’s not a collapse yet, but they’re emptying the bank on this invasion for very little real gain. At some point, even the oligarchs protected by Putin will have to ask themselves how long they’re willing to go toward financial ruin. — Ed]

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