Ruble plunges to record low after Russia invades Ukraine

Russia's invasion of Ukraine and the corresponding sanctions have triggered a sell-off in the ruble.

Driving the news: The currency has dropped to a record low against the dollar, falling roughly 6% over the last two days.

• The ruble is down about 19% against the dollar since last October.

How it works: The ruble/dollar exchange rate is conventionally expressed as the number of rubles that you can purchase with a single dollar — so a higher number means a weaker ruble.

Why it matters: The sell-off means investors think ...

1. Sanctions announced Tuesday by the U.S. and its allies will bite the Russian economy. Or...
2. Heavier sanctions are coming, after Russia advances its invasion into Ukraine. Or...
3. Both of the above.

Details: A weaker currency effectively raises inflation — because imports get more expensive — and will likely hurt Russian consumer confidence.

Yes, but: Don't expect a bit of inflation to dissuade Russian President Vladimir Putin from his military objectives.

• Russia isn't a democracy. He doesn't have to worry about a sour mood among the voters unless things get so bad that people take to the streets.

The bottom line: Sanctions are going to hurt the Russian economy. But don't bet on them influencing the man in charge.

Go deeper:

• Ukraine-Russia crisis latest developments
• Russian military attacks kill dozens of people in Ukraine