Russia: Economy down, ruble out

(Baonghean) - The Russian State Statistics Service announced on August 10 that in the second quarter of 2015, the Russian economy declined by 4.6%. Previously, on July 31, the Russian Central Bank lowered interest rates for the fifth time since the beginning of the year. And of course, the ruble lost its value. The reasons are clear: economic sanctions from the US and the West, and falling oil prices (also partly related to the West's sanctions policy). Since 2009, the 4.6% decline is Russia's worst decline.

However, the Russian economy is currently experiencing something that seems to be out of the ordinary. While the national currency is falling and the economy is in crisis, more billionaires are appearing. Even stranger is the phenomenon of the ruble being able to “go abroad” and replace the USD.

Specifically, Russia has recently had dozens of new billionaires. According to official figures from the federal statistics agency, over the past year the number of taxpayers with an income of more than 1 billion rubles increased by nearly 6%. Last year, the number of billionaires was 292, this year it is 309. The number of millionaires has also increased significantly (from 1 million to 100 million rubles increased by 13%).

Illustration: internet

According to economists, this is not due to business growth, but to the government's policy to end tax evasion and limit the flow of assets abroad, so the number of people filing tax returns and paying taxes increased. Many rich people brought part of their foreign assets back to Russia and their income was declared in Russia.

Along with the return of assets to Russia, there is the “export” of rubles abroad. In Heilongjiang province, the Central Bank of China decided to introduce rubles to replace the USD. On August 8, the Monetary Policy Committee of the Central Bank of China officially announced this and said that the circulation of rubles instead of USD is a harmonious development in bilateral trade relations. Suifenhe is a border city with Russia, a major trading center of Heilongjiang province with Russia. This city accounts for 80% of the province's exports to Russia and the export turnover in 2014 reached 7.59 billion USD. Therefore, the decision to widely circulate rubles in Suifenhe is to attract Russian partners and customers.

It is known that in 2014, Russia and China had a currency swap agreement worth 150 billion yuan (24.5 billion USD). This is actually not difficult to explain because China is currently Russia's largest trading partner.

Currency swaps and ruble exports also clearly reflect the nature of the relationship.

politics. When the Russian economy is facing a blockade by the US and the West, China is the wide door that is opening for Russia. China using the ruble at this time is also a way for Russia and China to create a closer relationship to strengthen their counterweight to the US and the West.

Chi Linh Son