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Leonid Bershidsky

The Strong Ruble Doesn't Mean a Russian Recovery

The currency's strength is artificial.
Strong and silent.

Strong and silent.

Photographer: Andrey Rudakov/Bloomberg

It's a measure of international investors' desperation that they are long the Russian ruble and other Russian assets. Even though fears of a major Russian onslaught in Ukraine are likely to prove unfounded, there's nothing about the Russian economy that can support an asset boom, and it's only a matter of time before the central bank is compelled to weaken the currency.

Since the beginning of this year, the ruble has delivered the third-highest returns of any currency to carry traders -- those who borrow in U.S. dollars to buy debt denominated in other currencies.