Russia prepares for a weaker rouble
The Russian Central Bank has over the last months spent billions on the defence of the rouble. Now the bank lets the rouble weaken to beyond its former minimum level. At the same time, worry spreads among ordinary Russians who still remember the 1998 rouble crisis.
The Central Bank is now establishing a new limit for the rouble. The intervention of the bank has over the last weeks significantly strained Russian currency reserves.
Central Bank chief Sergei Ignatyev had flagged the move on Monday, saying “some rouble weakness was possible”.
Interventions to prop up the rouble from widespread capital flight have helped slice more than 100 billion USD off national gold and forex reserves since early August, taking them below half a trillion dollars, the Moscow Times reports.
The weakening of the Russian currency comes only two weeks after Russian Deputy Finance Minister Sergey Shatalov said that talks about a devaluation of the rouble was nothing more than “rumours”, Newsru.com reports.
Several experts now say to the site that the weakening of the rouble against dollars and euro is likely to continue over the next couple of years.
