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5 Feb, 2009 14:07

Rouble reaches Central Bank's limit

The Rouble briefly slipped below the Central bank's trading limit of 41 to the dollar-euro currency basket at around 1300 Moscow time on Thursday.

The Central Bank of Russia said it's ready to spend a billion dollars to keep the currency above 41.

That value of 41 to the curency basket implies a value of 36 to the dollar, and the Central Bank has set the Rouble at 36.30 to the US dollar for Friday.

Morgan Stanley says the Rouble, which has been devalued more than 20 times since November 2008, could slide as much as 18 percent against the dollar by the middle of this year

Speaking to RT, international investor James Rogers, was critical of Russia’s Central Bank policy of setting limits for the Rouble, and adding that there can be an upside to a currency collapse.

“I worry that your Central Bank has said it will not go any lower, and whenever Central banks have said that throughout history they have been wrong. The market has learned to always bet against central banks. I would say let the Rouble do what its going to do and if it collapses, you may remember that once in the past the Rouble collapsed which was in 1998. It was a fabulous opportunity, I wish I had been smart enough to come and invest in Russia in 1998. I did not, I was foolish.”

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