Will the Russian Economic Crisis Create a Political One?
Moscow’s stock market soared almost 30 percent on Friday thanks to the Russian government announcement it would dump about $130 billion into the sagging market. Today, it injected more credit into the market just to make sure. About $24 billion worth at 8.75 percent interest. The move was to disperse more capital among banks pushed out of the previous trough. The flood from state coffers attempts to do another thing: isolate the Russian market from the American financial crisis. A staggering 70 percent of the Russian market is made up of speculative foreign money which explains why Russian stocks did such a nosedive. As Vladimir Forlov writes in the Moscow Times,
Medvedev and Prime Minister Vladimir Putin reacted in ways that signal a fundamental shift. The government is now seeking to reduce the stock market’s dependence on foreign portfolio investors and to attract more long-term investment from Russia’s institutional investors, including ..read more
