Economist Says Russian Central Bank's Steps To Slow Deterioration Of Ruble Do Not Support Fundamental Solution, Possibly 'Counterproductive'

Speaking to Benzinga, Southern Polytechnic State University Economist Dr. Mikhail Melnik said that he understands the desperate efforts of the Russian Central Bank to slow down the deterioration of the ruble.

But Melnik feels that these steps do not offer a fundamental solution and may even be counterproductive. He explained that the exchange rate is very important.

“Russia imports a lot of finished products from medications to computers to cars from overseas, and a drop in the value of the ruble is not only inflationary but damaging to the most vulnerable segments of the population,” he said.

The SPDR S&P Russia ETF RBL was down 2.1 percent at $13.38 Tuesday afternoon.

The Market Vector Russia ETF Trust RSX was nearly unchanged at $13.96.