Are sanctions on Russia failing?

Sanctions are the West’s key weapon in the fight against Putin, but there are signs that Russia’s economy and financial system is weathering the storm better than expected. The rouble has already bounced back and Russia has been able to continue to service its debts, with only minor hiccups. A closer look however reveals that sanctions are biting hard – and that Russia is losing the economic as well as military war.

Take the rouble’s resurgence, which is not what it seems. The ability of Russia’s currency to bounce back reflects the fact that Russian imports have fallen by more than the country’s exports, as local consumers and businesses have cut spending. This means there is less demand to sell roubles to buy foreign currencies.

The central bank has also propped up the rouble, but the measures it has used to do so are unlikely to endure for long. Conventional intervention in the markets – involving selling some of the country’s large reserves of international assets to buy roubles – has helped. So