Russia's central bank has taken a major step towards floating the rouble by limiting its daily interventions. As David Pollard reports, that accelerated the slide in the Russian currency and made investors even more nervous.
The rouble's lost almost a quarter of its value since mid-year. There was some surprise then - at least among consumers - at a decision to effectively remove its floor. Not least of all because of stubbornly high inflation. Vladimir Evstifeev is an analyst with Zenit Bank. SOUNDBITE (Russian) DEPUTY CHIEF ANALYST OF ZENIT BANK, VLADIMIR EVSTIFEEV, SAYING: "From the point of view of the people the thing that comes first is inflation. We are facing the fact that inflation lowers people's income and as a result leads to less consumption.'' The central bank hopes halting big interventions will stop speculators driving the rouble down. It should, it's hoped, find its own natural floor. Russia's spent seventy billion dollars propping it up this year - almost 30 billion of that last month. And, last week, the bank hiked its main interest rate one and a half percent. But it's been losing the fight - and even now, is far from winning it, according to Philippe Gijsels of Fortis Bank. SOUNDBITE (English) PHILIPPE GIJSELS, CHIEF STRATEGY OFFICER, FORTIS BANK: ''Even the sanctions, even before Ukraine, we thought that the rouble would be more volatile, would be weaker in 2015 / 2016 because the country would go from a surplus on the balance of payments to a deficit. And because they have the oil and the gas revenues but they have to pay with that for all the rest and now with oil down, it's even going to get worse. So still I think that there is a clear issue and, indeed, if you look at the figures, and that's a fact and not an opinion, that the Russian economy is being hurt.'' Even so, many economists do support the move as potentially shielding Russia from external shocks - like the recent 25 percent drop in the price of its key export - oil. Rebecca Harding of Delta Economics. SOUNDBITE (English) REBECCA HARDING, CEO, DELTA ECONOMICS: ''Russia and China are building very strong relationships in oil and gas supply. There's a realistic proposal on the table to price the deals in roubles and in yuan between Russia and China. That actually means that the Russian government has to be seen to be trying to introduce the rouble actually as a trade currency alongside the yuan or the euro or the US dollar, particularly in terms of commodity prices like wheat and oil. So, floating the rouble is a move in the right direction.'' The rouble fell a further one and half percent on the news. Consumers - and the central bank - will be crossing their fingers that the slide may end there.