Putin's (not so) secret weapon:
Elvira Nabiullina, Governor of the Bank of Russia. She is very, very good at this stuff.
From CNBC Africa, February 28:
Russia central bank more than doubles interest rate to 20% to boost sinking ruble
- The bank also said it would be freeing 733 billion rubles ($8.78 billion) in local bank reserves to boost liquidity.
- Russian Central Bank Governor Elvira Nabiullina will hold a briefing at 1 p.m. London time Monday.
- The dramatic developments underline fears of a run on Russia’s banks.
Russia’s central bank on Monday more than doubled the country’s key interest rate from 9.5% to 20% as its currency, the ruble, hit a record low against the dollar on the back of a slew of new sanctions and penalties imposed on Russia by Europe and the U.S. for its invasion of Ukraine.
The rate hike, the central bank said, “is designed to offset increased risk of ruble depreciation and inflation.”
This follows the central bank’s order to halt foreigners’ bids to sell Russian securities in an effort to contain the market fallout. The ruble fell as far as 119.50 per dollar, down a whopping 30% from Friday’s close.
The bank also said it would be freeing 733 billion rubles ($8.78 billion) in local bank reserves to boost liquidity. Russian Central Bank Governor Elvira Nabiullina will hold a briefing at 1 p.m. London time Monday....
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Last I saw, the rouble had strengthened some, to 102.41. So her next goal will be to not only stop the bank runs (that's easy, shut the banks for a couple - 5 days) but to restore confidence in the currency.
As foretold by the prophecy (sort of) on Saturday after the first, very weak moves:
Western allies agree to cut select Russian banks from global financial messaging system SWIFTThis action only hits banks that have already been sanctioned. If The EU and others really wanted to shake things up they'd go after the unsanctioned banks. name names, and watch the (attempted) bank runs on Monday....
