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Russia Is Trying to Shore Up the Ruble By Giving Banks Money to Bet Against the Ruble

posted 489 weeks ago on CrossingWallStreet.com

Or something like that. Russia?s central bank is exacerbating the ruble?s 35 percent plunge since August, even as it struggles to defend the exchange rate, by providing loans to banks that speculate on the currency, say Alfa Bank and UniCredit SpA. Bank Rossii lent 7.7 trillion rubles ($214 billion) in overnight and seven-day loans secured with bonds or other collateral in the 16 trading days last month, about double the 4.8 trillion rubles provided in so-called repurchase auctions in December, central bank data show. The ruble lost 18 percent against the dollar in January. It weakened today beyond the lower limit that the central bank said it will defend. ?A significant amount, if not all, of the speculative attacks on the ruble are funded by the central bank itself,? said Vladimir Osa

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