The Georgian lari, steady for three years, was the latest to fall, joining ranks this week with about half the currencies spawned by former Soviet states which have weakened considerably since the rouble began a 70 per cent drop in August.

But the apparently co-ordinated falls have more to do with mutual problems, such as low tax collection and low world oil prices, rather than mutual dependence on Russia of the former satellites, economists say. Since the rouble was devalued on August 17, falling to 21 to the dollar now from about six, currencies in Ukraine, Belarus, Moldova and Georgia have also slipped badly.

"The main reason for this (situation) is the shortcomings of our own state," Georgian president Eduard Shevardnadze said on Monday, when the lari dropped to about two per dollar, and was expected lower, from under1.50 two weeks earlier. Ukraine, which has loosened the corridor of its hryvnia currency against the dollar and is considering abandoning it, has a similarly poorly funded budget. "The Russian crisis affected Ukraine, but only indirectly. The direct cause of Ukrainian crisis are domestic, though similar to those that brought about the Russian crisis, with the exception of political reasons," said Viktor Zinchenko, deputy head of treasury at Kiev's First Ukrainian International Bank.

"The primary reasons are the budget deficit, our relations with foreign creditors and, then, indirectly the rouble exchange rate and our trade balance with Russia." As the rouble continues to slide, neighbours will shudder, since Russia is the largest trade partner of most, but economies that were successful in transition had found new trade partners, said Caren Gaboutchian, emerging markets economist at London's ING Barings.

"The countries that have made a lot of progress on structural reforms are likelier to have less tradewith Russia than those that haven't done anything," he said. Reform holdback Belarus sends 70 per cent of its exports to Russia, and Moldova sends 60 per cent, but most republics sent 30 per cent or less from closer to half their trade a few years ago. Armenia's tight fiscal policy and reform had attracted foreign investment, keeping the currency strong despite high trade volumes with Russia. Energy exporters like Kazakhstan and Azerbaijan have gained independence from Moscow by peddling their reserves. And, as for Russia, the lowest oil prices in years have hit budgets.