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. Last Updated: 07/27/2016

EDITORIAL: Post Panic, A New Test For Ruble

Yevgeny Primakov often looks out of his depth when he talks about the economy. Brought in amid a collapse of the national financial system, he surrounded himself with Soviet-trained economic managers of dubious talent. This team has few successes to point to, and won't offer many soon.

But it seems likely that Russia will end up owing a debt of gratitude to Primakov for at least one economic legacy - and that is the ruble.

Primakov's team, born and bred in the U.S.S.R., never embraced the market. But in the wake of August's meltdown their suspicion was well-timed. As the ruble slipped in a matter of weeks from 6 to the dollar to 9.5 to 12 to 20, they interceded with government regulation. No more free trade in the ruble, they decreed.

Today, only people who truly need to exchange money to do business - in other words, mostly importers and exporters - can buy and sell rubles. They do so almost exclusively with the Central Bank, in tightly restricted trading sessions on the Moscow Interbank Currency Exchange that herd the dollar-sellers (exporters) into a morning session and the dollar-buyers (importers) into an afternoon session.

The ruble steadied - even though the price of oil and gas, which bring in Russia's every second dollar, remained depressed.

Defying market forces through dint of sheer will and obstinacy will only take a nation so far. As evidence, there is the Soviet Union: Not so long ago the ruble was at 1 to 1 against the dollar, but at 40 to 1 on the black market. Or for a more contemporary comparison, look at Belarus, where collective farmer-turned-dictator Alexander Lukashenko has the currency in chains - and just had to introduce a humiliating 1 million ruble note.

But in the short term, putting the market on a leash and jerking back hard works. That's why, for example, Wall Street in the wake of the 1987 crash built automatic trading halts into its computer systems that kick in when the market melts down too quickly - which works to prevent short-term panic, if not long-term trends.

Primakov's team has headed off the short-term panic. And now that world oil prices are climbing, the long-term trend may take care of itself.

In fact, a new concern might be an oil-fattened strong ruble - the old 1-to-1 Soviet fetish, or the 6-to-1 obsession of recent years. Now that we've all had a taste of a weaker ruble, a new test for Russia's future economic managers - whoever they may be - will be to remember its advantages in kick-starting investment in the real economy.