“Russian rubles” by Petar Milošević. Licensed under Public Domain via Wikimedia Commons

Per Newsweek:

Putin’s aggression prompted western-led sanctions aimed at choking his war machine, but Russia’s economy has still grown, helped in part by record military spending.

But war losses have fueled a worker shortage that has stoked inflation, which Russia’s Central Bank has tried to cool with a key interest rate that it dropped to 20 percent last month—still too high for business leaders unhappy at how it stifles lending and investment.

The Central Bank can claim its interest rate has worked, albeit temporarily, after reporting four percent inflation, but this small victory may be only a façade of domestic economic stability as sanctions and state bailouts loom.

…

Russian economy expert Vasily Astrov, of the Vienna Institute for International Economic Studies…  said this high key rate has cooled domestic demand, with the welcome side effect of decreasing inflation. But the downside is that the economy has “come close to stagnation” and nonperforming (late and unpaid) loans (NPLs) have increased.

…

The think tank added that any failure of a major Russian bank would undercut Putin’s narrative that neither the war in Ukraine nor Western sanctions are hurting the Russian economy.

Slava Ukraine!