Friday, December 12, 2014

Want a sign that the Russian economy is spiralling down the tubes?

As of yesterday for the first time ever, the Russian Ruble is now worth less than the Kyrgyz Som. Kyrgyzstan is a former soviet republic, so its currency was originally created out of the Soviet Ruble, with an initial exchange rate of 1 Ruble to 200 Som. In 1993 the Soviet Ruble was replaced with the Russian Ruble on a 1-to-1 basis. That Ruble was replaced by the New Russian Ruble in 1998, with 1000 old Rubles for every new Ruble.

If currency value had remained stable over the past 22 years, the Som would be worth 5 current Russian Rubles. Instead they are close to parity. (It's also worth mentioning that the economy of the Kyrgyz Republic is teeny tiny compared to Russia's.)