12/17/14

Permalink Russia's next financial option may be 'nuclear'

The Russian Central Bank has seemingly lost control of the ruble, which lost more than 20% in just hours on Tuesday. Currency interventions and interest rates both have failed to save the ruble. The next major step could be limiting the cash flow. After the Russian ruble fell to 1998 lows on Monday, the Central Bank met late into the evening and hiked the main lending rate to 17 percent to offset the tailspin ruble. It worked- for about four hours, then the ruble against nosedived against the dollar, euro, and sterling. On November 10, the bank introduced the ruble's free floating policy- which meant it would stop directl financial support, and would instead let the markets guide it. Before that, the Central Bank tried interventions, and after burning through $80 billion in foreign reserves, the ruble still went bust. The markets took it to to new depths and lows. On Tuesday the euro nearly touched 100 rubles and the US dollar 80 rubles, both more than this time last year.

RT.com: Ruble tempest, tries to make ground after traumatic turmoil
Itar-Tass: Russia has resources, market instruments to rectify economic situation — Medvedev
Russia Insider: Sergey Glazyev Blasts Russia Central Bank in Economic Manifesto
Vineyard of the Saker: Sergei Glaziev: Stupidity Is Worse Than Theft
BNE: Russia Central Bank Is Protecting Foreign Reserves. That's Why It Can't Defend the Ruble
Zero Hedge: China, Russia Dump US Treasurys In October As Foreigners Sell Most US Stocks Since 2007
Itar-Tass: Russia’s Finance Ministry ready to sell $7 billion on market to prop up ruble
Andrea Peters Russian ruble collapses amidst mounting social and political tensions

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