Russia - Are Rouble Deposits at 15% - 18% a sure bet?

November 10, 2009 - Russia central bank warns speculators as rouble rallies.

MORE CUTS TO COME

Pressure on the rouble is rising as a result of carry trades, the practice of borrowing in lower-yielding currencies to invest in those carrying higher interest rates. 'Therefore rate cuts would reduce pressure on the rouble,' he added.

The central bank has already reduced the refinancing rate by 350 basis points since April to an annualised 9.50 percent to help the economy out of its first recession in a decade, but that rate still remains far above rates of 1 percent or less seen in major developed economies, encouraging carry trades.

The rouble has firmed by more than 8.5 percent against the basket since its rally began in early September, recovering half of its losses incurred during gradual depreciation a year ago, when oil prices collapsed.