Saturday, May 25, 2024

Russians aren’t the only victims of the ruble’s implosion — the weak currency is also hitting migrant Central Asians who repatriate the cash

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Central Asian economies are getting hurt by the weak Russian ruble too.

Mahmut Serdar Alakus/Anadolu Agency/Getty Images

The weak Russian ruble is hurting Central Asian workers in Russia too, per Radio Free Europe.
At least 6 million Central Asians work as migrant laborers in Russia.
As the ruble fell against their home currencies, so did the amount of money they remitted back home

The ruble’s crash isn’t just hurting Russia — it’s affecting the country’s central Asian neighbors, too.

At least 6 million Central Asians work as migrant laborers in Russia. The value of the ruble dropping against their home currencies means they are sending less money back home — and this is hurting their finances, Radio Free Europe reported Monday.

The ruble has fallen so much that it is close to a key 100 level against the US dollar. One dollar buys around 95 rubles now, as compared to the 74 rubles it could buy at the start of 2023. The crash is so concerning that high-level Russian government officials are taking public potshots at one another over its collapse.

The situation is especially concerning for migrant workers from Tajikistan and Kyrgyzstan, which are highly dependent on remittance from citizens working in Russia as the cash transfers make up over a quarter of their GDPs, per Radio Free Europe. 

The Russian currency is down 15% to 20% against the Kyrgyzstani som, the Kazakhstani tenge, the Uzbekistani som, and the Tajikistani Somoni so far this year.

The situation is so serious that about half of migrant laborers are considering leaving Russia due to the weak currency, the Vedomosti business daily reported last Tuesday, citing a survey among the Uzbek diaspora in Russia.

Their departure could worsen the labor crunch in Russia.

There are other problems for neighboring Central Asian countries due to the collapsing ruble.

They are now caught between cheap Russian imports flooding into their markets or letting their own currencies fall alongside the ruble — which would be politically contentious.

In a Facebook post last week, Kazakh political commentator Serik Belgibay said Kazakhstan is in a difficult position with two bad options: “leave everything as it is,” which would let the cheap ruble “gradually kill” domestic production, or allow the Kazakh tenge to devalue alongside the ruble, which would cause inflation, per Radio Free Europe’s translation.

 

 

Russia’s central bank raised interest rates last Tuesday by 350 basis points to 12% at an emergency meeting in a bid to prop up the ruble.

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Central Asian economies are getting hurt by the weak Russian ruble too.

Mahmut Serdar Alakus/Anadolu Agency/Getty Images

The weak Russian ruble is hurting Central Asian workers in Russia too, per Radio Free Europe.
At least 6 million Central Asians work as migrant laborers in Russia.
As the ruble fell against their home currencies, so did the amount of money they remitted back home

The ruble’s crash isn’t just hurting Russia — it’s affecting the country’s central Asian neighbors, too.

At least 6 million Central Asians work as migrant laborers in Russia. The value of the ruble dropping against their home currencies means they are sending less money back home — and this is hurting their finances, Radio Free Europe reported Monday.

The ruble has fallen so much that it is close to a key 100 level against the US dollar. One dollar buys around 95 rubles now, as compared to the 74 rubles it could buy at the start of 2023. The crash is so concerning that high-level Russian government officials are taking public potshots at one another over its collapse.

The situation is especially concerning for migrant workers from Tajikistan and Kyrgyzstan, which are highly dependent on remittance from citizens working in Russia as the cash transfers make up over a quarter of their GDPs, per Radio Free Europe. 

The Russian currency is down 15% to 20% against the Kyrgyzstani som, the Kazakhstani tenge, the Uzbekistani som, and the Tajikistani Somoni so far this year.

The situation is so serious that about half of migrant laborers are considering leaving Russia due to the weak currency, the Vedomosti business daily reported last Tuesday, citing a survey among the Uzbek diaspora in Russia.

Their departure could worsen the labor crunch in Russia.

There are other problems for neighboring Central Asian countries due to the collapsing ruble.

They are now caught between cheap Russian imports flooding into their markets or letting their own currencies fall alongside the ruble — which would be politically contentious.

In a Facebook post last week, Kazakh political commentator Serik Belgibay said Kazakhstan is in a difficult position with two bad options: “leave everything as it is,” which would let the cheap ruble “gradually kill” domestic production, or allow the Kazakh tenge to devalue alongside the ruble, which would cause inflation, per Radio Free Europe’s translation.

 

 

Russia’s central bank raised interest rates last Tuesday by 350 basis points to 12% at an emergency meeting in a bid to prop up the ruble.

Read the original article on Business Insider
Avatar

Read more

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