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Mixed denomination ruble coins sit in this arranged photograph in Moscow, Russia, on Tuesday, Aug. 5, 2014. When oil fell through the $27 (U.S.) floor Wednesday, the currency crashed to a record low against the U.S. dollar.Andrey Rudakov/Bloomberg

Bank of Canada Governor Stephen Poloz may not be having much fun minding monetary policy these days as the economy stumbles and his options narrow. But things could always be worse, as his embattled Russian counterpart, Elvira Nabiullina, can no doubt attest.

The Bank of Russia chief and her fellow directors will hold their first policy meeting of the year on Friday against a grim backdrop of recession, double-digit inflation and a battered currency. Despite deepening economic woes exacerbated by low oil and gas prices, the bank is expected to leave its key rate at 11 per cent amid concerns about inflation and extreme volatility in the currency market.

Ms. Nabiullina, Russia's economy minister during the global financial crisis, spent much of last week putting out new ruble fires. When oil fell through the $27 (U.S.) floor Wednesday, the currency crashed to a record low against the U.S. dollar. Crude regained some lost ground the next day, but the ruble depreciated further, plumbing an all-time low of 86 to the greenback before recovering to 82.50.

By comparison with the ruble and some other petrocurrencies, the loonie looks like an island of stability.

At first, the 52-year-old economist helped fan the flames, rebuffing entreaties from officials to intervene in the market by selling foreign currencies from Russia's reserves, as she did during a previous ruble rout in late 2014.

"The purpose of the international reserves is to ensure the stability of the national currency – they exist for that very reason," Sergei Glazyev, an economic adviser to President Vladimir Putin, told Tass news agency.

"Our international reserves are twice the size of the amount of rubles in the economy. It is easy to stabilize the ruble exchange rate, and it would even have been possible to keep it fixed over the course of the past year."

But Ms. Nabiullina, who was Mr. Putin's chief economic adviser before taking the central bank post in 2013, would have none of it.

"We will intervene only if we see risks to financial stability," she told Bloomberg. "There aren't such risks now."

Some analysts agreed. "We see no reasons for the CBR [central bank] to fight the oil-driven move," ING Bank's chief Russia watcher Dmitry Polevoy said in a note.

What really rattled markets, though, was her insistence that the collapsing ruble was trading at a fair value.

Surveying the state of the energy-export-dependent Russian economy and its grim prospects if prices don't rebound soon makes it hard to argue with that.

Still, Ms. Nabiullina cancelled a scheduled trip Friday to hobnob with the likes of Bank of England Governor Mark Carney, European Central Bank President Mario Draghi and other leading policy-makers at the World Economic Forum gabfest in Davos, Switzerland.

And then she took a page straight out of Mr. Draghi's well-thumbed playbook, which favours strong language over action to cool overheated markets.

At a meeting of finance-ministry officials in Moscow, she vowed to deploy the central bank's arsenal "pro-actively" to curb the ruble's wild swings.

"The Bank of Russia is vigilantly monitoring the market situation," Ms. Nabiullina said. "We don't want to allow an excessive rise that wouldn't be based on fundamentals but on factors related to the currency-liquidity situation and other disturbances in the market."

As oil climbed back to $32 a barrel Friday, the ruble jumped more than 5 per cent against the greenback, its biggest rise since Ms. Nabiullina shocked the markets in December, 2014, with an emergency rate hike of 6.5 percentage points to combat soaring inflation and put a net under the then free-falling ruble.

The bank rate has remained unchanged since last July, when officials made the last of five consecutive cuts that lopped off six percentage points, essentially reversing the emergency increase.

After their previous meeting Dec. 11, policy-makers signalled that they would resume cutting soon, once they are convinced inflation is heading toward single digits and there is no risk of a sudden resurgence.

But a rate hike on Friday can't be ruled out. Whether Ms. Nabiullina has another market surprise up her sleeve remains to be seen.

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