Russian economy on the brink as emergency moves fail to shore up collapsing rouble

Daily Telegraph ^ | 16 Dec 14 | Peter Spence

[elhombrelibre]

A brief rally in the rouble has ended, as an interest rate hike made in the dead of night has failed to restore investor faith in Russia's currency

An overnight interest rate hike by the Central Bank of Russia (CBR) led to a brief rally in the value of the rouble, but it hasn’t lasted long.

Late on Monday the CBR announced that it was increasing its key rate by 6.5 percentage points to 17pc.

The emergency move came as a monumental decline in oil prices and continued uncertainty over Ukraine has led the rouble to fall by more than 50pc over the course of the year.

The currency's slide has reflected a huge loss of confidence in the Russia economy. The state is heavily dependent on oil - oil and gas account for 67pc of exports, and 50pc of government revenues.

The value of that oil has fallen by close to 48pc since its peak in June, dropping below $60 a barrel for the first time since 2009 on Tuesday.

[4rcane]

I thought collapsing currency is the goal of all central banks.

[Cringing Negativism Network]

Pay no attention to one billion people in China, which is now the world’s biggest producer.

Worry about our ex-opponent.

Sure, worry about Putin. Pay no attention to China.

[donozark]

Price of one US Dollar in Rubles is now 77. Per Bloomberg. Hard times ahead for the people of Russia.

[elhombrelibre]

We can multi-task, FRiend.

[elhombrelibre]

Bloomberg now says 80.

http://www.bloomberg.com/news/2014-12-16/ruble-snaps-six-day-loss-on-surprise-rate-increase-to-17-percent.html

[donozark]

Some traders now talking “one hundred.” Collapse eminent. As always, the poor will suffer first and the most. It just didn’t have to be this way...

[Old Teufel Hunden]

"The CBR has said that it expects Russian GDP to fall by as much as 4.7pc in 2015 if oil remains at the $60 a barrel level."

The definition of a recession is two or more quarters of zero to negative growth as measured by GDP. The definition of a depression is a serious deep recession. That's a little amorphorous, but I would say that by most people's rekoning, experts predicting a contraction of almost 5 percent for the whole year sounds like a depression.

We have Russia going into depression, the EU, China and Japan slumping into recession and America receeding from the world stage. With a toxic mix like this brewing, what could go wrong?

[edpc]

With the current state of our shrinking forces and aging equipment, I’d say we don’t. One large scale, yes...but no longer two.

[hondact200]

It is all planned by the NWO - Coming soon to a nation nearby economic collapse. The USA becomes borderless as other nations chop it up into various pieces whereby the other nations are in charge. Russia is chopped up into pieces and so is China. The new World Order is in place and guess who runs it the corruptocrats from Washington DC.

[edpc]

An economically and militarily weakened Russia needs to be more concerned with China than we do. There’s a ton of needed resources right next door.