The rouble’s plunge against the dollar and the euro continues. <br /><br />In October alone Russia’s central bank spent over 13 billion dollars of its reserves buying up the currency to stop it falling faster.<br /><br />It is under pressure because of the Ukraine crisis, a dramatic slump in oil prices and Western sanctions, which limit Russian firms’ access to international capital.<br /><br />Finance Ministry and central bank moves to give Russian banks and companies greater access to foreign currency have had little effect. <br /><br />At the start of this year, one dollar would buy you 33 roubles. Now it is worth 41 roubles. <br /><br />ING Eurasia analyst Dmitry Polevoy believes the central bank will respond: “To prevent panic among the people, and to secure financial stability of the Russian financial and banking system it’s unlikely they’ll allow a total and uncontrollable rouble crash. In the worst-case scenario the central bank will postpone its plan to switch to a floating rouble exchange rate, which was due by the end of this year or the start of next year.”<br /><br />Russian banks say they have seen a big rise in demand for dollars from their customers, up 80 percent month-on-month in August; those are the latest available stats and were only released in mid October. <br /><br />It is not a panic, but does suggest that more ordinary Russians are losing confidence in the currency.
