The Russian economy (catch all)

[Firn]

http://news.yahoo.com/russia-warns-c...6261.html?vp=1

I truly hope for the Russian people that Putin does not listen to him, for Russia the economic game is already tough enough and scoring own goals is more likely to wreak economic havoc at home.

Bloomberg, one of those nasty capitalist websites, reports:

Shrinking Reserves

Bank Rossii sold between $10.5 billion and $12 billion to support the ruble yesterday, Dmitry Polevoy, chief economist at ING in Moscow, wrote in an e-mailed note. The central bank is scheduled to release data on the size of the sales tomorrow, in accordance with its policy to post figures with a two-day lag.

Russia’s foreign reserves have fallen $40 billion since May to $493 billion, according to data through Feb. 21. ING said the country’s “net” war chest, excluding its sovereign wealth fund, gold and International Monetary Fund reserves, is about $270 billion. Allowing for funds to cover three months of imports, it shrinks to $150 billion, he said.

The central bank allows the ruble to float within a flexible corridor against its target dollar-euro basket. Bank Rossii said it will set the amount of market interventions it takes to shift the trading band on a daily basis, giving officials more flexibility in determining how many dollars it sells at a given price level before weakening the ruble’s trading band.

Yesterday, policy makers set the threshold at $1.5 billion, up from $350 million previously, according to the statement on Bank Rossii’s website.

I would love to hear if and how much money they used yesterday to keep the ruble afloat. However it is quite possible that the Russian Central Bank is already under orders to keep things as much as possible under wraps.

Some threats out of Russia from this Glazyev sound like really a parody, I had to laugh when I heard that he came up with the idea to drop the US dollar as a reserve currency.

From Reuters:

A Kremlin aide said on Tuesday that if the United States were to impose sanctions on Russia over Ukraine, Moscow might be forced to drop the dollar as a reserve currency and refuse to pay off any loans to U.S. banks.

Catch that? Glazyev is literally threatening to put his own companies into default. That's the opposite of a threat.

....

Glazyev probably thinks it sounds good domestically to make these threats and to imagine that they're of any significance. For everyone else they're just an amusement.

Well put, quite likely but then again he might believe his own nonsense.