Is Russia laughing up its sleeve? Reminiscent of Br'er Rabbit pleading with Br'er Fox not to throw him in the briar patch.
So the Central Bank of Russia has been selling $20 billion of its stash of foreign currency and buying rubles to mop them up and relieve some pressure. But rather than trying to stop or reverse the ruble’s decline, the Central Bank appears to be managingthe decline. A sudden crash of the ruble could have chaotic consequences, while an orderly decline in the middle of a currency war may well be just what it wants.Wolf Street
Beyond the Sanctions, Russia Wins Currency War
Wolf Richter
5 comments:
Hi Tom Second Link broken
The missing link
Thanks. Fixed.
All this currency wars/merchantilist stuff is WWII-in-the-making redux.
This not gonna end well. We never learn apparently.
If you stop the russian banks lending rubles to settle currency deals, then you can't have a 'collapse' anyway. People ram up against their settlement limits and have no way to get away from them.
Ultimately in a currency deal you have to deliver the currency. Stop people getting hold of new currency and they have to buy it with something else.
The important point is to let the world know that the central bank won't get involved buying its own currency. That's for somebody else to deal with - in this case likely the Chinese.
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