The situation looks like a replay of the 1997 East Asia crisis. Countries like Russia are trying to defend their currencies by buying up their local currency (like rubles) with dollar and other reserves. In essence, they want to maintain a dollar peg even though their banking systems have inflated even more than the U.S. The funds become exhausted rather quickly because this scheme only provides an opportunity for traders to sell them more of the local currency for dollars. The IMF will lend them even more dollars to continue this ploy which will fail, inasmuch as the equilbrium exchange … Continue reading IMF gets into the act