On the surface, it appears that Russia's central bank is doing what it should to support the value of the ruble. Rubles are being purchased on the foreign exchange market, using foreign reserves. The central bank's interest rate targets have been raised, with the main overnight credit rate now at 12%. However, a closer inspection reveals that the central bank -- like most central banks in these sorts of situations -- is neglecting to address the most important factor, the number of rubles in circulation.
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