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Propping Up the Ruble

This is starting to get scary. Like we said months ago, keep your eye on the Russian currency as the bellwether of her political environment. From the Associated Press:

The ruble has declined steadily since the Aug. 7 start of the five-day war with Georgia, losing some 10 percent to 12 percent of its value against the dollar. Without intervention by the central bank, which began in early September, it might have fallen further, faster. Anton Struchenevsky, an economist at Troika Dialog investment bank, said Monday the Central Bank was spending $600 million a day to buy rubles and support the currency’s exchange rate, for a total of $20 billion in less than two months. Other experts put the cost of defending the ruble as high as $50 billion. While Russia has more than half a trillion dollars in foreign exchange reserves, Struchenevsky said: “This cannot last forever.”