Crashed: How a Decade of Financial Crises Changed the World

by Adam Tooze

The cornerstone of the Kremlin’s crisis-fighting strategy was to prevent a death spiral of devaluation and bankruptcy. In the first phase of the crisis, the central bank deployed its ample foreign currency reserves to stem the fall in the ruble. As a result, as oil prices plunged by 64 percent between October and December 2008, the ruble lost only 6 percent against the dollar.12 Only in January did Moscow let the ruble go, allowing it to devalue by 34 percent before stabilizing in February. Like any successful rearguard action, it came at a price. The central bank burned $212 billion of its reserves, 35 percent of the total, to slow the slide. But by so doing it bought time, allowing dollar-exposed borrowers to pull in their horns and giving the state some time to launch its own response.13

Wow!