In June, the dollar to ruble exchange rate grew by 10% and last Friday exceeded 89 rubles. There are questions in the air – what to do, how to live?

The ruble has a tradition: once every couple of years, it is loudly and sharply rattled for some reason. The last long-running “cheburakh” has been going on for exactly 12 months: June 30 was the anniversary of the ruble’s 2022 peak of its “special operation” greatness at the rate of 52 RUB/USD. In the year that has passed since that moment, our jubilee has given a lot: the dollar rate has grown by 71% and last Friday exceeded 89 rubles.

In the moments of mental confusion caused by the convulsions of the native currency, any Russian (okay – only those who have at least something saved up in the financial sense) are worried about important questions: whether it is necessary to urgently buy dollars “for the whole cutlet” (because in the future it will be completely unclear what will happen with the ruble, hell it will be completely unclear what, hell it will be completely unclear what, hell it will be unclear what, hell all over hidden green pieces of paper at a high rate while they last (remember this tweet).

I personally believe that this is all from the evil one. My first article on VC (in March 2020) was called “The ruble is falling, the crisis has begun, we will all die – what to do?”, and it, as before, remains quite relevant for re-reading every currency crisis. A few key takeaways from there:

🐌 Do not read “expert predictions” about the currency – most of them are completely useless (and the ones that do make some sense, you can’t reliably distinguish in advance anyway).

🐌 What is more important is not what you do at the moment of a currency shock, but what you did with your money before it. Your basic capital allocation across currencies shouldn’t hurt you too much if exchange rates swing in either direction.

🐌 Loans should be taken in the currency in which you receive income (no dollar mortgage, if the salary is in rubles), and the capital should be kept in the currency in which you plan to spend (it is pointless to accumulate in rubles, planning emigration, for example, to Europe).

🐌 But at the same time, it is necessary to take into account basic expectations of long-term changes in currency rates – for example, from the difference in inflation rates in economies. If in conventional Argentina inflation is stable at levels close to 100% per year, then it is logical to include a depreciation of the peso against the dollar at a similar rate in the basic scenario of the further development of events and take this into account when making decisions.

It may also be interesting to read the discussion in the comments on my RationalAnswer blog.