The Almighty Ruble

Published in the New York Times on 8/6/07, this is a great article to begin this project with. It covers the increasing financial strength of the ruble as a national and international currency. Of special note is the discussion of intelligent macroeconomic practices of the Kremlin, building of large monetary reserves and increasing inflow of foreign capital, as well as diversification of Russian financial interests away from the dominant reliance on "petrorubles," something the country has been heavily criticized for under the Putin administration. Also, the article provides a useful perspective on Russia today as compared to the 1990s.

Some quotes:

"Together with the Central Bank of Russia’s foreign reserves, Russian authorities have a currency reserve of $413 billion, the largest per capita foreign currency reserve of any major economy, including China’s. In an oil downturn, authorities could spend that reserve to protect the ruble."

"...oil exports are not the sole source of the ruble’s rise. That was the case before 2007, but now foreign investment has become a significant factor. Private capital flows into Russia increased roughly 360 percent in the first six months of this year, compared with the same period last year. Only about 30 percent is attributable to oil and other extractive industries, according to the State Statistics Committee."

"Starting in 1990, the year the Soviet Union collapsed, Russia’s economy contracted by as much as 40 percent. This year, for the first time since, Russia’s gross domestic product returned to 1990 levels: factories, oil pipelines, roads, ports and other facilities that once were idled are operating near full capacity."

"In the first six months of this year, net private capital inflow into Russia was $67.1 billion — more than during the entire first decade after the collapse of the Soviet Union. In the same period last year, capital inflow was $14.5 billion."

The full article can be found here:
NY Times - The Almighty Ruble