Russia seems to be asking for a speculative attack on the rouble after a shoddy defence of its currency on Tuesday, according to Renaissance Capital. The Moscow-based investment bank is thoroughly unimpressed by the move to try and stem the currency’s 17 per cent slide. Bloomberg quotes Rencap analyst Alexei Moisseev’s saying the intervention has achieved nothing, just cost $7bn of Russia’s foreign exchange reserves.
Investors generally seem to agree.
Russia’s Micex Index plunged 13 per cent in response on Tuesday, and was closed on Wednesday. The dollar-quoted RTS, meanwhile, was down nearly 11 per cent at 647.
Just to contextualise the troubles facing Russia, here’s a snapshot of the declines on the RTS over a longer duration.
Chris Weafer, chief strategist at UralSib, warns the situation now risks a repeat of the 1990s. He tells Bloomberg if confidence erodes any further, the next thing we could see might be a massive run on the banks.
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