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30 Dec, 2008 07:03

Rouble slump continues as Russians mull over their stash

The Russian Rouble continues to hit all-time lows as Central Bank allows the currency to depreciate. It has caused many Russians to think over what to do with their money.

ROUBLE DOLLAR EURO CASH: These are the words Russians are bearing in mind at banks and ATM machines.

Three sharp drops last week and another one Monday for the Russian national currency from the Central Bank – all a part of the government's policy of gradual devaluation – have led to reduced faith in the Rouble at home. Ordinary Russians are hedging their currency options.

“To save deposits in one currency isn't good – they say don't put all your eggs in one basket. So I'll put part in foreign currencies – dollars or euros – and the rest in roubles – which is what I use for purchases.”

“The government promised the Rouble would get stronger, but we've seen the opposite – a decline.”

“With this situation, it's best to take it out. I'd withdraw my cash.”

“I took mine early!”

“I hope I won't have to yet.”

“I'm personally not scared. I think everything will be normal. Russia is a strong country – we'll survive.”

Monday's depreciation was the 12th since a weekly widening of the trading bank by 1 percent began on November 11th.

Evgeny Nadorshin, Chief Economist, Trust Bank, Moscow assumes the Central Bank is upping its pace in a move to save foreign currency reserves.

“As far as Russian government seems currently to consider the term, it looks like they are ready to accept the devaluation of approximate 3% each week or even more, and this is not steep yet, according to the official translation.”

The first deputy chairman of Central Bank has denied rumors of sharp depreciation of the Rouble – before the New Year. But that hasn't stopped people from taking steps to safeguard their cash.

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