The rouble continues its headlong slide downwards after the Russian central bank's relaxation of exchange controls - but then bounces. As Joel Flynn reports, some analysts are now warning of a 'self-fulfilling' currency crisis.
Talk may be of tanks, but on the streets of Moscow, it's currency that's cause for concern. A deepening crisis of confidence in Russia's rouble - pushed down more than 10 percent against the dollar this week. Politics and foreign policy-prompted sanctions are biting the country hard. But it's the central bank's move this week to change its intervention policy that's seen the slide. IG's Brenda Kelly. SOUNDBITE: IG Market Analyst, Brenda Kelly, saying (English): "Certainly since the Russian central bank have decided not to get involved in terms of intervening, despite pumping about 30 billion into the FX markets last month, it does seem like it's going to be an organic pull back, but it is, a lot of it, down to dollar strength as well." Some signs the head of Russia's central bank was discussing her options after the heavy losses. Falling prices in oil and commodities are compounding tough sanctions from the West over Ukraine. Patrick Armstrong is from Plurimi Investment Management. SOUNDBITE Plurimi Investment Management Managing Partner, Patrick Armstrong, saying (English): "Russia very much dependent for economic growth on commodities, so when you've got that combined with sanctions it's very difficult to see an end to the rouble sell-off right now." It's not just the currency that's causing consternation - the five top capitalised companies in Russia have now lost over 100 billion dollars in market value since the beginning of the year. The fall in the rouble adding yet more woe for those targeted by sanctions. Pierre Briancon from Reuters Breakingviews. SOUNDBITE: Reuters Breakingviews Assistant Editor, Pierre Briancon, saying (English): "If you do it in dollar terms, of course you have both the stock market fall and the rouble fall, and this of course explains why you have companies like Rosneft, this one is hit by sanctions, Gazprom - mostly oil and gas companies - and Sberbank, the big state-owned bank have plunged so far." Expectations are that the currency is still overvalued. More pain for Russia and its central bank could be in the offing. And the prospect of further sanctions raised even further by the latest reports of Russian tanks crossing Ukraine's eastern border.