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Achievements of Elvira Nabiullina as central bank chief in Russia since 2013 are the reducing of US dollar reserves from 40% to 11%of $600 billion in Russian reserves shifting to hold most of its reserves in euros, gold or renminbi Chinese currency. She also implemented the alternative to SWIFT the global bank messaging system, and changed the payments infrastructure to process credit card transactions in the country so departure of Visa and Mastercard had minimal effect.

In this way this highly respected banker has protected Russia's economy from western sanctions, says NYT. She is trusted by president Putin and was adviser to Putin in 2012, minister of economic development before that when Putin was prime minister. When Russia suffered an economic crisis in 2014 as oil prices fell sharply and Saudis increased oil production, the ruble fell. Nabiullina increased rates to 17%, and the economy shrank till it stabilized with inflation down to 4% by 2017.

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Russian president Putin tells Russians at an annual news conference on Dec. 17, 2014, that the West wanted to deprive Russia of its natural resources. He says steps taken by the central bank and his administration were proper, including avoiding capital controls, except that the decision to raise interest rates to 17% in mid-Dec. should have been taken earlier. He deflects criticism that the sanctions and the decline in the ruble were "payment for Crimea" (Russia's takeover of the Crimea) by saying it was "payment for our independence, our sovereignty." Putin expressed unease with the expansion of NATO to Russia's borders. He told Russians to expect that the crisis will last for 2 years and during this time the Russian economy will adapt, in particular shifting its heavy dependence on oil exports. During the 10 years of the Putin administration since 2004, Russia has not made a vigorous effort to diversify away from oil dependence. Progress was made primarily in better integrating the economy with the European Union, entry into WTO, building a sovereign reserves fund, until the crisis in Ukraine. The Putin years may be seen in the future as the transition years towards a more diversified economy, and may lead to a shift away from the kind of management of economic and foreign policy by a single leader that may have led to the disruption in relations with Germany, a critical economic partner for Russia. Chancellor Merkel said Germany would continue to support sanctions as long as Russia opposed the right of self- determination of people in Europe and European values. Germany continues even now to maintain dialogue with Russia through Social Democrat Foreign Minister Steinmeier, which is why Putin continues to refer to it as "our partners" and cites the differences with our partners, very different from the Cold War period when no such close relations with Germany existed. ...

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Michael Birnbaum, the Post, Moscow bureau chief talks to experts and politicians in Moscow about the economic situation as the ruble declines by 36% since July, with the fall in oil prices accelerating its fall and reducing the impact of central bank intervention in slowing the decline. He cites a Putin interview with Tass news agency in Nov. which he says a tieup is possible between the U.S. and Saudi Arabia to bring down oil prices as a way to strengthen the effect of sanctions in changing Russian policy. Russian Finance minister Anton Siluanov says lost oil revenue impact is about $90 to $100 billion a year, added to the cost of sanctions at $40 billion. Significant capital flight also adds to the overall cost. Russian companies borrowing in dollars have large debt payments due that will need to be supported by the Russian government, an added cost. This will put the Russian economy in recession in 2015. The central bank expects inflaion at 10% in 2015. Large losses of this magnitude will be harder to sustain and deplete international reserves of $429 billion as of Oct. 2014. The thinking of ordinary Russians is reflected in an independent Levada Center opinion poll showing 61% of Russians expecting a decline in living standards and economic crisis in the near future. The man most responsible for stabilizing Russia's finances, former finance minister Alexei Kudrin, who had profound public disagreements with president Medvedev over increases in the military budget, warned of an economic crisis following the parliamentary and presidential elections. A major weakness of the Putin-Medvedev second and third terms is the failure to use higher oil revenues to expand the tech sector and other industries to diversify Russian exports away from oil. ...

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The Russian currency, the rouble crashed to 0.8 cents to the US dollar from 1.3 cents. It has now bounced back to 1.2 cents. Peter Coy of the NYT says this is the result of Russian oil and gas exports to Europe and other parts of the world which continued after sanctions for the invasion of Ukraine. The increase in oil prices from the war actually increased Russian oil revenues by a third. Another reason is the steps taken by the Russian government to ask for payment for energy supplies in roubles. 

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Russia raises interest rates by 6.5% to 17% on Dec. 15, 2014, as Brent crude prices fall below $60 and pressure on the ruble increases. Anticipation of the U.S. Federal Reserve raising interest rates in 2015 puts pressure on emerging market currencies, adding to pressure on the ruble. All emerging market currencies, the Brazilian Real, South African Rand, Indian Rupee, Indonesian Rupiah, Turkish Lira, also come under pressure as money flows out of emerging markets in a repeat of the situation in January 2014.

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The Russian economy has proved stronger than other emerging markets in a similar situation. The ruble has declined from 35 to the dollar before the Ukraine crisis and sanctions in 2014 to 86 to the dollar in Jan. 2016. Foreign currency reserves dropped from $600 billion to $385 billion in 2009, when Russia with memories of 1997 when the ruble collapsed, decided to prop up the ruble. In Nov. 2014 Russia's central bank let the ruble float, this time responding in a different way following western sanctions over Ukraine and a emerging markets crisis. Interest rates were increased to tackle inflation.A key rate was raised to 17% in Dec. 2014, dropping by Jan 2016 to 11%. Inflation was 12.9% in Dec. 2015, the target for 2017 is 4%. The economy has contracted by 3.7% in 2015, and expected to contract by 1% in 2016, according to the IMF. Alexsei Kudrin, former finance minister, expects modest growth in 2017.

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Elvira Nabiullina, head of Russia's central bank, is a think tank economist who was Economy minister before becoming chief economic advisor to Russian president Putin in 2012. She is one of the liberal economists in Russia who see the years of economic growth following ruble devaluation in 1998 as an example of how devaluation can actually help the economy. The devaluation lowers costs for manufacturing and agriculture, and is seen by some economists as having done more than oil price increases to help the Russian economy grow during president Putin's first term from 1999 to 2004. Nabiullina's position to support a free float after the sharp decline in the value of the ruble following the plunge in oil prices, is based on the need she sees to use the crisis to reduce Russian overdependence on imports. This policy had other advantages by reducing the need to tap Russia's foreign currency reserves to defend the ruble. Russia's gold and foreign currency reserves are at $385 billion. In Jan 2015 the central bank cut interest rates. A policy of increasing rates would trigger a sharper recesssion. Russia faces a unique situation in that the oil price decline and the decline in the value of the ruble occurred at about the same time of about 50%, so that the budget continues to be balanced. The number of rubles coming in from oil exports remains the same after the crisis. Nabiullina told Russia 24 television- "We have to live in a different zone, Russians should orient ourselves more toward our own sources of financing projects, and to give a chance to import substitution."...

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By May 2015 the Russsian ruble had recovered to 50 to the dollar from the low of 80 to the dollar in 2014. In August 2015 the ruble declined to 70 to the dollar as oil prices dropped below $40 per barrel. GDP growth showed a decline of 4.6% for the economy in the 2nd quarter of 2015. The ruble has lost close to 50% of its value in 2015 compared to the prior year.

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The ruble goes from a low of 80 to the dollar in Dec. 2014 to 50 to the dollar by May 2015. The euro also strengthens against the dollar with weakening economic conditions in the U.S. leading to a reversal in the strength of the dollar.

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Brent crude drops below $60 by Dec. 15, 2014.

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Russia's leading business paper Vedemosti summed up the situation on Dec. 17, 2014, in its editorial- "This is a very dangerous situation; we are separated from a fully fledged run on the banks by just a few days..If the currency market is not reassured right now, the banking system will require large external support." Warning signs were evident at a banking conference in Moscow in October 2014 when the Economy minister, the central bank head Nabiullina, and the head of the largest bank Sberbank, German Gref, expressed skepticism about the economic policies and the risks involved. Not until Dec. 17, was a decisive response evident and the risks of a collapsing ruble openly addressed with economic actions by the Putin administration. A collapsing ruble would have repercussions on the global financial markets and slowing global economy, increasing potential geopolitical risk, and adding to risk of contagion for other emerging markets, which was reflected in the nervousness of global financial markets on Dec 15-16, 2014....

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The U.S. and the EU join together for stronger economic sanctions on Russia. The sanctions affecting large Russian banks ability to raise capital in financial markets are likely to affect the Russian economy. Russia was suspended for export credit and development finance. VTB Bank was one of three more Russian banks added to the list of banks with economic sanctions. The EU took similiar action against Russian state owned banks and imposed an arms embargo in July end 2014.

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Casey describes the crucial policy errors in Brazil with over spending and lack of transparency in the years leading to the crisis in 2014-2015. Brazil raised interest rates half a percentage point in May 2015 to 13.25%. Inflation was at 8.13% in Brazil in March 2015. Brazilian companies have large dollar denominated debt accumulated during the boom years which needs to be refinanced as its currency the real declines. With current policies economic growth is likely to continue at 0-1%. Russia made policy errors with the departure of Kudrin as finance minister for Putin's second term as president. Policies to attract foreign investment, controlling military expenditures, and continuing growth were reversed as Russia took positions on Ukraine that led to western sanctions, capital outflows, and a sharp decline in the ruble. By May 2015 the ruble and oil prices had recovered from lows, but the ruble was still 35% below the level in June 2014, and the oil prices were still only two thirds of the peak in 2014. Russia sees the decline in the ruble as a way to reduce imports and increase import substitution for many products. The economy is weakened by high inflation- inflation was 6.9% in March 2014, going up to 16.9% in March 2015. In May 2015 Russia lowered the target repo rate by 1.5 percentage points to 12%. Russia faces stagflation- high unemployment with low GDP growth, and high inflation....

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Brazil's economy is forecast to contract by 2% in 2015, the currency has lost about one third its value and the stock market is down 22% in the last year. This follows the decline in demand for Brazil's commodities exports as China growth slows down. Experts say Brazil is now seeing another boom bust cycle similiar to boom-bust cycles in the past, such as the 1966-73 boom followed by years of hyperinflation and stagnation. Brazil's exports to China declined 17% in the first 7 months of 2015. The crisis is in many ways similiar to crises in other emerging markets dependent on commodities exports. The resources boom leads to overvaluation of the currency, and decline in development of manufacturing away from dependence on commodities exports. Other errors rise from complacency and politics prevalent in such periods. These errors include mismanagement of resources with poor resource allocation decisions such as spending on soccer stadiums in cities in the northeast while basic bus services remained underfinanced in large urban areas, large overspending by the government using state owned bank BNDES to offer rates at below market rates, a credit fueled boom and credit card binge for households, and a reversal of capital flows from the U.S. and Europe with the sharp decline in investment climate. There is a severe loss of confidence in the government of Dilma Rousseff with her approval rating as low as 8%. Corruption scandals at Petrobras show close links between the Workers Party of Rousseff and executives, with about $2 billion in misused funds. Brazil, like other emerging markets such as Russia and India, have taken some lessons from the 1997 financial crisis by setting aside large foreign exchange reserves for a crisis. Brazil's reserves of $397 billion help it cushion the effects with funding of the safety net and support to industries to avoid large layoffs. Other problems not tackled as in Mexico, India, and other emerging markets, are the weak educational system, and poor infrastructure, that create bottlenecks for growth. Brazil could face a lost decade after the debt overhang, decline in foreign investment and commodity export generated revenues. ...

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Finance Minister Joaquim Levy, a University of Chicago trained economist, is replaced by planning minister Nelson Barbosa, as the new Finance Minister of Brazil. President Rousseff faces criticism as Brazil's economy contracts and ordinary Brazilians feel the effects of fiscal austerity policies pursued under Levy. Former president Lula da Silva was critical of Levy's policies.