Currency crises in post-Soviet Russia

Currency crises have been a recurrent feature of Russia’s post-Soviet experience. This paper examines three episodes of sudden and sharp ruble depreciation in 1998, 2008, and 2014-16. We examine these crises and their political consequences as iterative episodes in the Russian government’s ongoing efforts to deal with its structural dependence on energy revenues and international capital flows. We argue that the 1998 crisis and the Russian government’s response to it proved effective in transforming policies and institutions that had contributed to the ruble’s collapse, but also paradoxically reinforced the central role of resource revenues and international capital flows in Russia’s political economy. Policy decisions after 2008 then represented variations on a theme, leaving the Russian government better able to manage future currency crises while simultaneously maintaining and deepening the state’s underlying structural vulnerabilities as well as its patronage-based political-economic system. The crisis of 2014-16 may, however, ultimately bring greater shifts in policy as Russia adapts to fundamentally changed international circumstances