Russia Cash Squeeze Gets First Test Today in Loan Auction
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Russian policy makers’ latest bid to shore up the nation’s currency sounds complex but is actually simple: They will take rubles out of the hands of banks.
Fewer rubles means bankers will have less cash to buy dollars. That in turn will stem the selloff in the ruble. Or so goes the argument. On day one, the plan -- or at least the unveiling of the plan -- worked. The ruble surged 1.7 percent yesterday to 45.8525 per dollar, rebounding from a record low even as policy makers simultaneously took other steps to allow it to trade freely.