Putin’s economy is in a state of crisis. (Image: Getty)
is trying to reassure that they won’t feel the impact of as Moscow’s economy is hit with a currency crisis.
Dmitry Peskov, the Kremlin’s spokesperson, said: “Russians won’t notice the dollar exchange rate increase because they are paid in roubles.”
The Rouble dropped 8.5% on Wednesday as Western sanctions and rampant inflation took hold.
Since the start of August, the Rouble has lost 35% of its value.
The Russian currency was trading at 114.5 against the US Dollar, the lowest level since the start of the invasion of . It had recovered to 111.5 by Thursday morning.
The Ruble is trading at a three year low against the US Dollar. (Image: Getty)
To stifle the inflationary pressure, the Russian Central Bank raised to a record 21%.
Russian media reports that the bank could hike them further to 23% in December.
The inflation has caused basic products such as potatoes and butter to rise by tens of percent since last year.
Supermarkets in are even reporting a huge spike in butter theft, with some stores locking dairy products away in secure fridges.
’s finance minister, Anton Siluanov, has also tried to dampen concern recently.
He said: “I am not saying whether the exchange rate is good or bad. I am just saying that today the exchange rate is very, very favourable for exporters.”
A third of Russia’s spending is now on its military. (Image: Getty)
Over two and a half years into the war, Putin is now allocating a third of ’s 2024 budget to military spending.
A report by the Institute of Economic Forecasting at ’s Academy of Sciences said that “slowing economic activity and deterioration of financial indicators are becoming increasingly evident in a number of sectors”.
Both Russian economists, Alexander Kolyandr and Alexandra Prokopenko warned that the military spending is hitting other parts of the economy.
They added: “The only place growth is still noticeable is in sectors linked to the military. Everywhere else in the economy growth is absent, or, at best, anaemic.”