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23 Oct, 2008 05:28

Putin rebuffs rumours of rouble devaluation

Vladimir Putin says exchanging roubles for dollars is a “doubtful venture” because of uncertainty over what the dollar could do next. The Russian Prime Minister was speaking in an attempt to calm fears over the stability of the currency which

The dollar has recently enjoyed its highest boost for two years. Thousands of Russians are eager to change their money into dollars on the back of rumours that the rouble was about to weaken dramatically against the US currency.

Eugene Fazleev works in asset management and is also an active blogger. Many of his friends have asked him for advice.

“Many letters and blogs that circulated were written in such a way as if to deliberately stir up panic. To me it was a clear sign that nothing of the kind would happen. I tried to tell my friends but still half of them fell for it,” says Eugene.

Initially a publication appeared in the Ukrainian media claiming that within days the rouble will drop almost two-fold in comparison to the US dollar. This was gladly picked up by Georgian media, with all of them referring to reports from Reuters.

But the British news agency says it was simply misinterpreted.

“What happened was that an unauthorised Ukrainian website, which is not allowed to use our information, took this news that we reported correctly, distorted it, and wrote a false story on its website,” says Reuters Russia Bureau Chief Michael Stott. 

The crisis of 1998, when almost the entire country found itself bankrupt, is still fresh in the memory. But a lot has changed since then. And even with the oil prices falling and the international financial crisis in a full swing, experts aren't overly concerned about the Russian economy.

“My advice to market speculators – you should bet on the rouble staying stable or even strengthening somewhere,” says Christopher Granville from London’s Trusted Source Research Institute.

Despite all of this, during the past few days it was the US currency that continued to strengthen, and not only against the rouble, but the pound and euro as well.