Ye Tan: Without Strong Foreign Aid, Russia'S Dilemma Will Not Come To An End.

Russia's crisis is slightly different from the 1998 financial crisis.

Russia's financial crisis in August 17, 1998 led to the Russian government's devaluation of the rouble and declared that it could not repay the debt on time.

The two crisis is closely related to the economic downturn. The difference is that Russia's debt burden is heavy in 1998.

In 1997, the Asian financial crisis led to a sharp fall in energy and metal prices, and the Russian economy was in chaos.

The unemployment rate rose, the fiscal deficit rose, the external debt rose and the economy declined.

The Russian government has entered a vicious circle, borrowing short-term high interest debt to deal with the urgent need.

In August 17, 1998, Russia finally devalued the ruble and announced that it could not repay the debt on time, resulting in a huge exposure to the products of the rouble. The famous us long term capital management company collapsed.

The direct cause of the Russian crisis in 1998 was the debt crisis.

Different from 1998, Russia is now

Although it is much more abundant, it will not be too big for short-term payment.

Many people worry that Russia's foreign exchange reserves are not as good as the data show.

In November 5th, Bloomberg said Russia had only $244 billion 500 million in foreign exchange reserves available.

In November 7th, Russia's foreign exchange reserves totaled $421 billion, but Russia's foreign exchange reserves stood at $524 billion in October 31, 2013, which has lost $103 billion in one year.

And we need to plot $45 billion gold reserve, US $12 billion IMF special drawing rights, and remove some of the sovereign wealth funds for pensions and so forth, and the final foreign exchange reserves will be around us $200 billion.

As the economic situation remains unchanged, foreign exchange reserves will melt like icebergs. By the end of 2015, Russia's foreign exchange reserves will be only 100 billion dollars.

What the Central Bank of Russia can do is save the rouble, raise interest rates, support the exchange rate, and reduce the debt burden for large enterprises.

In December 17th,

The Treasury said it began to sell foreign currency reserves, making ruble price rise slightly.

On the morning of December 16th, the Central Bank of Russia announced an urgent increase in the benchmark interest rate from 10.5% to 17%, the sixth increase in the interest rate of the central bank during the year and the largest increase in interest rates since the default of Russian debt in 1998.

The operation of the entity business is more difficult.

Russia quoted a medium-sized bank manager as saying that the Russian central bank raised the key interest rate to 17%, and the credit interest rate of Russia's large banks to large energy companies was 19%, which is the end of the banking system and physical businesses.

Russia's economy can not operate normally under this interest rate, and Russian banks stop interbank lending operations.

Almost simultaneously, Russia

The trading center announced that the US dollar reached 64.4459 of the risk management channel limit for rouble, which would not be accepted.

The foreign exchange market in Russia has limited the highest price and no longer accepts the government's above price limit.

at present

Everything is done to save lives and save debts. Economic growth is no longer the first consideration.

Can we prevent Russia from being hit by icebergs on the basis of current foreign exchange reserves and other swap agreements?

Rosneft, Russia's largest state-owned oil company, issued 600 billion rouble bonds last week at a price higher than the national debt. Bloomberg columnist LeonidBershidsky and Forbes, the first publisher of the Russian version, recently wrote that the move led to the collapse of the rouble.

The Russian Central Bank quickly incorporated the bonds into its own collateral list, so that other banks could use this part of their bonds as collateral to exchange liquidity with the central bank.

It is assumed that the commercial banks that purchase Rosneft bonds will mortgage the bonds to the central bank, then borrow the foreign exchange and provide this part of the money through the currency swap contract to the Rosneft, Rosneft can repay the foreign debt, or continue to produce with rouble, this is to give Russia the national strength to help Rosneft.