- They might not be that cash cow that Hugo needs and seems to expect.. What happened to his other "partners" Iran, Spain, China etc. After all the fanfare the follow up has been awfully quiet.

Russia lifts rates to 12pc to save rouble as crisis deepens

The surprise move last night came after the authorities had spent $7bn of foreign reserves in a matter of hours trying to defend the currency, at a lower level. The central bank has now spent $84bn of its reserves over the last month.

"The devaluation has begun," said Lars Christensen, Russia strategist at Danske Bank.

"The rouble has fallen out of its basket against the euro and the dollar. Russia is facing a serious confidence crisis and this could set off a self-fulfilling panic. What is clear is that economy is slowing drastically."

Chris Weafer, strategist at UralSib, said there were echoes of the 1998 crisis. "If people lose confidence, we could have a massive run on the banks as we saw twice in the nineties: then the game is up,'' he told Bloomberg.

Russia is battening down the hatches for a deep slump. It has downgraded is oil forecast to $50 a barrel next year, a level that will play havoc with the state finances. Expecting trouble, the Kremlin has mobilised the police to crush dissent.

http://www.telegraph.co.uk/finance/f...