Russian currency has suffered further gyrations. After falling more than three percent against both the dollar and the euro on Friday morning the rouble did bounce back somewhat in the afternoon.
That followed signs Russia’s central bank was planning emergency action to stabilise the rouble.
“This is full-blown panic, with signs of a self-fulfilling currency crisis,” Dmitry Polevoy, chief Russia economist at ING Bank in Moscow, said in a note.
“At such times, the central bank should intervene — after all, if this isn’t a risk to financial stability, then what is?”
Reuters reported it has been told by a source that bank Governor Elvira Nabiullina was holding a meeting but gave no more details.
The rouble went into free fall after the central bank scaled back its support for the currency earlier in the week. The move was intended to try to stop foreign exchange speculators from benefiting by forcing the rouble lower and betting against it.
The Russian stock market was also under pressure, slumping to a five-year low on Friday morning.
The dollar-denominated RTS Index at one point fell below 1,000 – its lowest level since the middle of 2009. In early 2011 it was over 2,000.
A combination of factors is hitting both share prices and the rouble.
They include the deteriorating situation in Ukraine with the apparent breakdown of the ceasefire there, Russia’s weak economy made worse by sliding oil prices and sanctions, inflation running at over eight percent and Russians who can moving their money out of the country.