Thursday, December 11, 2008

Russians Buy Jewelry, Hoard Dollars as Ruble Plunges

"Russia has drained almost a quarter of its foreign-currency reserves, the world’s third-largest, since August as it tries to slow the ruble’s decline. The central bank has widened the trading band five times in the past month, effectively reducing its defense of the currency amid plunging oil prices."

Russia would be better off raising domestic spending and investment to boost the economy, rather than trying to support its currency. We're no longer on a fixed exchange rate or gold standard. I guess they haven't figured that out yet.

Read full article here.

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