In the Emerging Market Storm, Look to Russia

The ruble has been swept up by the outgoing tide of the emerging market currency crisis. The Russian currency, down almost 17 percent against the dollar this year, sank to a two-and-a-half-year low on Thursday after Russian Prime Minister Dmitry Medvedev urged the central bank to cut interest rates to stimulate growth.

Traders are hyper-sensitive to government interference in the independence of central banks — as the recent example of Turkey illustrates. But further declines in the ruble are far from certain. Russia has stronger defenses than many of its emerging-market peers and, if needed, the central bank could still wield the bigger stick of a rate hike.