(KYIV) – Russia has printed a record breaking one trillion rubles (£9.3 billion / $12 billion / €11.1 billion) in a single day as the Kremlin struggles to contain multiple economic crises, according to analysis of Russian Ministry of Finance data.
The operation reportedly involved record government bond issuance purchased by commercial banks using central bank financing. In practical terms, Moscow is manufacturing liquidity to keep its war machine running and plug widening holes in the economy. This does not look like confidence. It looks like desperation.
Across Russia, motorists are spending their weekends hunting for petrol. Long queues are appearing from Udmurtia to oil rich Tyumen, where one woman documented an exhausting, day long search for fuel. The absurdity is unmistakable: citizens of one of the world’s largest oil producing countries cannot reliably fill their vehicles.
In Sochi, Ukrainian strikes reportedly destroyed an S-400 air defence system, hit two fuel depots and damaged a military airfield, destroying two helicopters and damaging another. Metal cages installed to protect the infrastructure failed, fires continued burning and the regional governor warned of coming fuel problems.
Ukraine’s expanding drone advantage is also threatening Russia’s wider energy industry. The enormous Rosneft refinery in Ryazan was reportedly targeted, petroleum product exports have fallen dramatically and Russia’s temporary benefit from elevated global oil prices appears to be disappearing.
The pressure extends beyond Russia. A vessel reportedly transporting Iranian weapons and armoured vehicles was struck in the Mediterranean and left unable to continue normal operations, suggesting that Moscow’s military supply networks are becoming vulnerable far from home.
Agriculture is deteriorating as well. Wheat in major producing regions is reportedly selling between 33 and 44 per cent below its break even cost. Kazakhstan is preparing a six month ban on Russian wheat imports, removing both a buyer and an important transit route.
Even Moscow is no longer protected. Property sales reportedly fell 41 percent inside the capital during August as fuel shortages, declining export income and record military spending converged.
The Kremlin’s answer is more debt and more newly created rubles. But creating money does not create wealth. It risks transferring the cost of the Russian dictator Vladimir Putin’s war into inflation, currency weakness and declining living standards.
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