Business News Europe — Ruble is now truly floating

During the worst of the ruble's plunge in recent weeks traders were completely wrong-footed: they expected the Central Bank of Russia (CBR) to step in and defend the national currency's value, but it did nothing.

"Where is the CBR?" lamented Tim Ash, head of emerging markets research at Standard Bank, as the ruble fell past the psychologically important RUB50/$ mark. Surely the central bank would not let the ruble fall further? It did.

Currency traders are waking up to the fact that when the central bank said the ruble was free floating it meant it. The lesson of 2008-09 when the CBR burnt through $200bn of reserves managing the ruble lower has been learnt: there is no point defending the indefensible. With oil prices in free fall there is no point trying to maintain the "old" exchange rate, especially when it remains unclear how low the oil price will fall. Better to preserve the country's hard currency reserves to bolster banks and help corporates pay off their international debt once the dust settles, than defend some arbitrary exchange rate.…

Goes on to explain how the CBR is managing devaluation and Russians are taking it in stride.

Eurasian Development Bank — Business News Europe
Ruble is now truly floating