The Russian Ruble is down 3% today, which is the biggest drop since the 2008 crisis. For a while it was down as much as 8%.There are rumors the central bank had to step in some 30 minutes ago. The Russian equity market is down 2% in USD making a new 5 year low. The MSCI Russia is currently down 35% in USD year to date. The fact that the crude oil price is trading below USD 70 has made market participants nervous in the Russian currency market. There have been indications already last week that more and more people are shifting cash from Ruble to other currencies. There are also some indications that bank deposits are being reduced. The combination of the geopolitical tensions, the sanctions on Russian banks and Russian companies and the sharp fall in the oil price has created a toxic mix for the Ruble. The Russian central bank recently announced that they have lifted the semi peg of the Ruble. The lesson has been learnt in the 2008-09 crises when the Russian central bank spent USD 200bn and in the end had to devalue anyway.
Posted on: Mon, 01 Dec 2014 12:19:08 +0000
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