Russia makes ruble fully convertible

Russia has lifted currency controls in a sign of new-found economic confidence less than eight years after the country defaulted on its massive domestic debt, devalued its currency and wiped out Russians' savings. "Now it will be more attractive to invest in Russia - this will increase investors' interest in Russia," Finance Minister Alexei Kudrin said on national television. Recent moves to begin trading oil and gas in rubles would help build confidence and increase demand for the Russian currency.

These signs of economic stability are in stark contrast to August 1998, when Russia defaulted on 40 billion dollars of domestic debt and the ruble went into free fall as Russians sought frantically to withdraw their ruble savings and buy dollars. The crisis, which happened despite a 22.6-billion-dollar loan from the International Monetary Fund (IMF), scared away foreign investors from the country and triggered an unprecedented flight of capital from Russia.

(2006-07-05 12:55:47 SGT) [Biz] Permalink

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