The Risks of Putin's Currency Rescue Plan

Russia has decided not to implement partial capital controls to stem the falling ruble, following speculation that the extreme measure was being considered. The government and exporters had discussed the move amid a slump in the currency, but it was decided not to implement the measure after talks between President Putin and the head of the Central Bank. The Bank of Russia recently announced an emergency interest rate hike to address the weakening ruble. If the interest rate increase does not work and the ruble continues to weaken, the government may impose capital controls as a last resort.