Four months into Russia’s brutal invasion of Ukraine, initial optimism about the effectiveness of the unprecedented sanctions imposed by the United States and its allies has started to fade. The ruble, which was trading at 75 rubles per dollar in January, collapsed to a low point of 135 in March. It has since recovered to 55, well above where it was prior to the invasion. Output, while not stellar by any means, has not collapsed either.
Does that mean the sanctions regime has been a failure? We do not believe so.