MOSCOW — Rumors are circulating in Moscow about a looming financial default, Novye Izvestia newspaper reports. The default is expected September 21-25 or October 1 at the latest. Some banks and exchange offices are advising clients to keep their dollars and “dump” rubles as long as the exchange rate is appropriate.

The newspaper reported several alarming incidents over the past two days. One Moscovite has saved money for a foreign car. When he came to his bank to collect RUR 400,000, or about $14,000, he was advised to spend it immediately because the default might occur at any moment.

Another example: a woman pensioner came to a bank to exchange $100. But an employee asked her: “What are you doing? Clever people are buying hard currency at any exchange rate – the ruble will devalue very soon." Interestingly, other clients at the bank office supported the employee, agreeing they also heard such a rumor.

However, rumors about financial upheavals have nothing to do with a default. A default can be defined as refusal to pay debts. Russia’s 1998 default was prompted by the government which went too far issuing short-term bonds and inflating its debt to astronomical levels and was unable to repay after world oil, gas and metals prices collapsed. The 1998 default hit both foreign partners and Russian bankers and their clients who lost tens of billions of dollars.

But things seem different today. The country is afloat with cash, thanks to record high world oil prices. Russia prepays foreign debt, fills its stabilization fund and creates a new investment fund. Petrol dollars continue to flood the country, and the government doesn’t know how to spend them. In this scenario, the Russian ruble should be very strong. But do we need it?

The financial default rumors could be triggered by a hike in the ruble/dollar exchange rate on Monday, when the American currency was up RUR 0.16 or 6 percent, the largest increase this year.

Another problem is a quickly strengthening ruble. Some analysts say the U.S. dollar would collapse to RUR 0.10 per dollar if the central bank stopped buying. But economy minister German Gref denied those rumors on Saturday. He said the government and the central bank doesn’t artificially hold the ruble. “Our exchange rate policy is aligned with the market, there are no artificial measures to prevent the ruble from strengthening,” he said.