Russia Devalues
Russia’s central bank devalued the ruble for the second time in three days Monday, but not before blowing $161 billion trying to defend the flagging currency.
The huge fall in the price of crude oil since the summer highs has drained 27 percent of the country's reserves, the world’s third-largest, trying to stem a 16 percent decline in the currency against the dollar.
It is possible we will see two to three more devaluations this week, said one analyst.
Prime Minister Vladimir Putin’s pledge to avoid a “sharp” devaluation of the ruble and let the currency fall gradually has dissuaded citizens from storming banks to remove deposits as they did in 1998, when many lost life savings as the ruble plunged 71 percent versus the dollar and the government defaulted on $40 billion of debt.
Standard & Poor’s downgraded the nation’s sovereign debt to BBB, the second-lowest investment grade rating.
It's no surprise therefore that Russia is so aggressive on the grain export market at the moment, nor that it is keen to help OPEC out in achieving it's targets re the price of crude.
The huge fall in the price of crude oil since the summer highs has drained 27 percent of the country's reserves, the world’s third-largest, trying to stem a 16 percent decline in the currency against the dollar.
It is possible we will see two to three more devaluations this week, said one analyst.
Prime Minister Vladimir Putin’s pledge to avoid a “sharp” devaluation of the ruble and let the currency fall gradually has dissuaded citizens from storming banks to remove deposits as they did in 1998, when many lost life savings as the ruble plunged 71 percent versus the dollar and the government defaulted on $40 billion of debt.
Standard & Poor’s downgraded the nation’s sovereign debt to BBB, the second-lowest investment grade rating.
It's no surprise therefore that Russia is so aggressive on the grain export market at the moment, nor that it is keen to help OPEC out in achieving it's targets re the price of crude.
