This was the week when the country’s long-festering crisis turned virulent. A last-ditch attempt to defend the exchange rate by raising interest rates to 17pc failed within hours, yet the shock is surely enough to set off a chain of corporate failures and push banks over the edge. Traders in the City watched open-mouthed as the dam broke on Black Tuesday. The event exposed the awful reality that the Kremlin does not have the infinite foreign reserves that many had supposed. “What is happening is a nightmare that we could not even have imagined a year ago,” says the central bank’s deputy chief, Sergei Shvetsov. The currency has since stabilised at 60 to the dollar. But it has lost half its value in a year. Russia’s $2.1 trillion (£1.3 trillion) economy has shrunk to $1.1 trillion, half the GDP of California. The external debt of Russian banks and companies has by mathematical effect ballooned to 70pc of total output. “A Russian downgrade to junk is only a matter or time,” says Tim Ash, from Standard Bank."