For all the brave talk on Capitol Hill about “crushing” new sanctions against Russia, you’d think that someone might have done their homework about what actually makes the Russian economy tick, let alone whether any of the ideas circulating among U.S. policy experts are likely to change the Kremlin’s calculus.
The dirty secret is that the Russian economy has become well-insulated against sanctions. Thanks to Russia’s orthodox version of monetary policy, approved by the International Monetary Fund, and the recent rise in oil prices, Moscow’s foreign currency reserves have recovered since their post-2014 dip and are now at an all-time high of almost half a trillion dollars. (That’s equivalent to one-third of Russia’s GDP and can cover 17 months of imports.)
