Russia’s central bank waited until the early morning hours to raise its interest rate from 10.5 to a whopping 17 percent to encourage citizens to hold rubles and foreigners to buy rubles. Rather than building confidence, markets interpreted the move as panic. By late afternoon, it took an unprecedented 80 rubles to buy one dollar. Despite its vaunted reserves, the mighty Russia gives the appearance of a Latin American banana republic, dependent on one product, with a collapsing economy and declining living standards that can no longer support Vladimir Putin’s expensive foreign adventures or keep alive his social compact with the Russian people.
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