exchange rates comparisons, especially for a falling currency, undervalue what the local buying power /economic impact of Billions of rubles is, in Russia.
The exchange rate is no longer valid. You can’t actually exchange US dollars into Russian Rubbles so to say 1R is worth 0.1$ doesn’t make sense because how can you make that comparison if you can’t actually do the conversion.
So at this point the exchange rate is just estimated but it might be much different if in theory we could actually do the exchange. Plus of course Russia is going to have to do this repair without actually having access to a large numbers of exterior markets. Again the fact that they can’t access markets that exchange rate calculations normally assume a country will have access to, messes up the calculations.
You cant exchange millions of dollars (but tbf you couldn’t do that easily in the best times), but people can exchange theirs money into euro and dollar for that rate (realistic limit is $10k/month, but there are legal ways to cricumvent that limit). To say “you cant actually exchange USD to RUB” is untrue.
I guess the argument is that if you can’t do it on a large scale, then it’s economically not that important. The market forces that would drive the price discovery of the exchange rate don’t work if you can’t trade freely.
Every billion im rubles is more around 10 million USD.
For a dam failure that sounds like a pittance.
exchange rates comparisons, especially for a falling currency, undervalue what the local buying power /economic impact of Billions of rubles is, in Russia.
Oh yeah, I forgot about purchase power parity.
Much better take, but who could tell us what a ruble buys inside Russia?
The exchange rate is no longer valid. You can’t actually exchange US dollars into Russian Rubbles so to say 1R is worth 0.1$ doesn’t make sense because how can you make that comparison if you can’t actually do the conversion.
So at this point the exchange rate is just estimated but it might be much different if in theory we could actually do the exchange. Plus of course Russia is going to have to do this repair without actually having access to a large numbers of exterior markets. Again the fact that they can’t access markets that exchange rate calculations normally assume a country will have access to, messes up the calculations.
You’re right. How are the calculations actually done then I wonder?
You cant exchange millions of dollars (but tbf you couldn’t do that easily in the best times), but people can exchange theirs money into euro and dollar for that rate (realistic limit is $10k/month, but there are legal ways to cricumvent that limit). To say “you cant actually exchange USD to RUB” is untrue.
I guess the argument is that if you can’t do it on a large scale, then it’s economically not that important. The market forces that would drive the price discovery of the exchange rate don’t work if you can’t trade freely.
That is a valid, but still different argument. Exchange rate still exists for average Joe (or Ivan), it isn’t North Korea (yet?)
Not all dams are equal. Some are bigger and more important than others. This one was likely one of the smaller ones.