Russia’s battered ruble recovered some of its recent losses against the dollar on Wednesday as the market welcomed measures by the Bank of Russia to shore up the country’s banks, and the Finance Ministry said it would start selling its excess foreign currency holdings, the Wall Street Journal said on December 17.
Russian authorities took the strong action to stabilize the country’s currency a day after the worst swings since Russia’s 1998 financial wipeout threatened the stability that has been the backbone of President Vladimir Putin’s 15 years in power, according to The Washington Post.
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Officials said they were fighting a “bacchanalia” that led the ruble to lose 17 percent against the U.S. dollar in the first two days of this week. The rapid evaporation of the value of Russians’ savings brought to mind bad memories of Russia’s default. Putin took office in the aftermath and solidified his control of the nation with the promise that it would never happen again, the Post said.
But the ruble itself was more stable Wednesday after some gyrations when the market opened, gaining 3 percent against the dollar in afternoon trading and making up much of what it lost Tuesday. Analysts said the market bore heavy signs of government intervention to stabilize the ruble, according to the report.
“The government and central bank have begun working seriously on stopping this bacchanalia on the currency market, ” Putin aide Andrei Belousov told Russian news agencies after Prime Minister Dmitry Medvedev convened an emergency meeting of top economic officials and the heads of major energy companies, the Post said.
Putin himself has refrained from commenting on the dimming economy this week, saving his thoughts for a Thursday end-of-year news conference, according to the report.
The central bank tactics have revived memories of Russia’s 1998 financial meltdown, when the nation defaulted on debts and hyperinflation wiped out a generation’s savings. Buoyed by rising oil prices, Putin devoted much of his early years to building institutions that would preserve economic stability, the report said.
As a result, Russia still has far more crisis-fighting resources today than it did then, including the world’s fourth-largest currency reserves. They stood at $416 billion at the beginning of the month, down $80 billion this year, the Post said.
