Tuesday, September 30, 2014

Tovarisch, can you spare a ruble?

Apparently, President Obama's restrained policy works better than 1) Bush's or 2) McCain's. You'd think rightwingers, with their self-proclaimed understanding of finance, would have understood how these things work.

After proclaiming in 2007 that the ruble was poised to become a haven for global investors, the Russian leader has watched it fade, a victim of his nation’s stagnating economy since the land grab in Ukraine. Now so much money is leaving Russia that its central bank is considering temporary capital controls, according to two officials with direct knowledge of the discussions. The ruble’s share of global trading dropped to 0.4 percent from 0.6 percent since 2012, falling five places to rank 18th most-traded in the world, while the yuan tripled to 1.5 percent, according to the Society for Worldwide Interbank Financial Telecommunication, or SWIFT.
Barry Eichengreen, one of the leading American theorists of reserve currencies, tells Bloomberg News:

 “I don’t know anyone who takes the idea of the ruble as a reserve currency seriously,” Barry Eichengreen, an economics and political science professor at the University of California-Berkeley, and author of a book on global reserve currencies, said via e-mail. “Holding financial assets in Russia is risky business.”

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