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Matt Levine

Levine on Wall Street: Ruble Trouble and Personal Benefit

Also, Bill Gross talks, as does Jeff Gundlach. And more on swaps push-out, fake oil in Belize, and financial-services rap videos.

Ruble trouble.

“Our traders are informing me that we see no bids to buy rubles,” says a Swedish banker, after the ruble lost more than 10 percent of its value against the dollar yesterday. And it's getting worse, even after the Russian central bank raised interest rates from 10.5 percent to 17 percent "shortly after midnight," which is generally not when you announce central bank actions if everything is cool. "In a situation where a central bank allows its currency to depreciate by 10% in a day, the message is that they have lost control, and their very credibility is at stake," says an analyst. Here at Bloomberg View, Leonid Bershidsky points out that the ruble's weakness yesterday wasn't related to oil prices, and traces it to a big Rosneft bond issue that the central bank quickly agreed to fund. (Craig Pirrong makes a similar case.) Joseph Cotterill compares this rate hike to those in the 1998 crisis ("The CBR hiked from 30 per cent to 150 per cent between May 19 and May 27 that year," so we're not there yet).