The Russian economy (catch all)

[OUTLAW 09]

Now the Russian economy is in total free fall and headed to total collapse.

http://www.bloomberg.com/news/2014-1...80788e032dc57d

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Russian media is having a hard time depicting the falling rubel and oil price.

#Rossiya24 is ditching Brent Oil price for $ -> ₽. Constantly rising number cements the optimism of viewers.
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Wechselkurs #Rubel / Euro und lpreis erstmals auf gleicher Hhe.
pic.twitter.com/B9T6LuwBlZ

Diese Website zeigt live den #Rubel-Absturz im Vergleich zum lpreis:
http://zenrus.ru/ #lastTweet
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Russian state TV anchor tamps down concerns over depreciating ruble by standing in front of the rate in the studio
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Russia's central bank has admitted it intervened to support the rouble in foreign currency markets last week spending a total of $4.53bn (£2.9bn).

It has spent more than $70bn supporting the rouble since the start of the year.

Its admission came as the World Bank warned the Russian economy would shrink by at least 0.7% in 2015 if oil prices do not recover.

Both the currency and Russian share indexes fell on Tuesday as global oil prices fell to a new five year low.

Rate rise?

Russia has been forced to defend its currency as Western sanctions, in response to its role in eastern Ukraine, and falling oil prices begin to bite.

But analysts suggested it may take a significant hike in interest rates to stop the currency from further falls as well as surging inflation, which stood at 9.1% in November.

"The CBR [Central Bank of Russia] simply is not doing enough to convince the market that it is serious, using a pea-shooter in terms of current piecemeal intervention," said Standard Bank analyst Tim Ash in a note. "It will need to hike rates significantly to defend the rouble, or let the rouble further weaken."

The bank has already raised interest rates by 1.5% in October to 9.5%. It is expected to raise interest rates further later this week.

On Tuesday the rouble fell by 0.9% against the US dollar to 54.25 roubles and lost 1.1% to 67.00 against the euro.

'Speculative demand'

Sberbank foreign exchange and rates chief strategist, Tom Levinson estimated the Russian central bank spent a further $300m to support the rouble in the currency markets again on Monday.

He added that the interventions had prevented the currency from trading much nearer to 60 roubles against the US dollar. But he said the rouble would be "unable to sustain lasting appreciation".

In November the central bank announced it was going ahead with a free float of the rouble by abolishing its unofficial link to the euro and the US dollar. It also announced it was ending automatic interventions to support the currency, instead propping it up only when it was deemed necessary.

The bank had previously supported the rouble when the exchange rate against the euro and dollar exceeded certain limits.

At the time the CBR's chairwoman, Elvira Nabiullina. said the bank would instead intervene in the currency market "at whichever moment and amount needed to decrease the speculative demand."

The bank has said it hopes to achieve a full floating exchange rate in 2015.

Economic woes

Meanwhile, the World Bank forecast Russia's economy would shrink by 0.7% in 2015, but warned that the contraction would be worse if oil prices were to keep sliding.

The World Bank said its forecast is based on a scenario of crude prices averaging at $78 in 2015.

But if oil prices fell to $70 on average, Russia's output would shrink by 1.5%, it said.

Russia's reliance on tax revenues from the oil industry makes it particularly sensitive to price movements.

It warned last week, the Russian government warned the economy would fall into recession next year.

Russia's economic development ministry estimates the economy will contract by 0.8% next year.

It had previously estimated the economy would grow by 1.2% in 2015.

Stock price fall

Both Russian stock indexes also fell heavily in response to the plunging oil price.

The dollar-based RTS fell 1.9% to 854 points, having earlier set a new five-year low of 847 points. The rouble-based MICEX index was down 0.7% at 1,471 points.

Brent crude fell 0.7% on Tuesday to $65.75, extending Monday's steep decline.

[OUTLAW 09]

Once upon a time there was a strong Ruble. Crude Oil was above $100 and apples were from Poland.
pic.twitter.com/qf6eS9pgQd

Opec is “effectively dissolved” as Bank of America sees oil at $50 http://fw.to/efwUV0C

Morgan Stanley yesterday pegged a potential price range at 45 over the net few years as there is a server over supply and virtually no demand.

[OUTLAW 09]

Once upon a time there was a strong Ruble. Crude Oil was above $100 and apples were from Poland.
pic.twitter.com/qf6eS9pgQd

Opec is “effectively dissolved” as Bank of America sees oil at $50 http://fw.to/efwUV0C

Morgan Stanley yesterday pegged a potential price range at 45 over the net few years as there is a server over supply and virtually no demand.

#Oil price lower as OPEC says 2015 demand for Its crude will be weakest in 12yrs.
http://bloom.bg/1x18UzT
pic.twitter.com/RbX3b4ydUh

[OUTLAW 09]

It seems the central bank has gone home for the day, so the ruble heading lower, now 54.79/$, 68.12/euro

[OUTLAW 09]

It seems the central bank has gone home for the day, so the ruble heading lower, now 54.79/$, 68.12/euro

Reason for plunging oil price (& ruble): #Russia is set to increase lending rates.
@BloombergNews pic.twitter.com/fPmXfZC6h4

BREAKING: Oil price plunges over 5% to $60.53
http://bloom.bg/1ukQHX7
v @BloombergNews
pic.twitter.com/Dr9SLPYd0Y

[Firn]

It seems now quite likely that the Russian central bank will hike it's rates, accepting the trade-offs. We will see, maybe they can weather the storm without but if the pressure on the ruble continues like that...

The head winds have gathered even greater force and thus the CBR did it, for the fifth time in this year. So far it doesn't seem enough to shield the ruble from further decline, it just slows it down.

Russia’s fifth interest-rate increase this year failed to stem the ruble’s worst rout in 16 years, risking further damage to an economy battered by sanctions and oil prices near the lowest since 2009.

The Bank of Russia increased its key rate to 10.5 percent from 9.5 percent, according to a website statement. That matched the median estimate of 34 economists surveyed by Bloomberg. The ruble traded 0.8 percent weaker at 55.2605 per dollar after the decision, breaching 55 for the first time. The central bank will hold a news conference later today.

“This is not enough to stabilize the ruble and increases the risk of a full-scale currency crisis,” Piotr Matys, a currency strategist at Rabobank International in London, said by e-mail. “The central bank may intervene more aggressively on the market, but selling hard currency already proved to be an insufficient tool, as reflected in the worst ruble rout since the 1998 crisis.”

[OUTLAW 09]

$60 oil will be norm for next 5 years:
Economist http://cnb.cx/1Dgd9uM

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#Russia's International Reserves Reduced by $4.3 Billion this Week http://bit.ly/1vHyraL
pic.twitter.com/aMo5DDtNlH

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The head winds have gathered even greater force and thus the CBR did it, for the fifth time in this year. So far it doesn't seem enough to shield the ruble from further decline, it just slows it down.

firn---remember when we talked about 60 being the bottom limit---maybe that 45 is far more accurate right now.


CRUDE OIL BREAKS $60
http://www.businessinsider.com/oil-p...ber-11-2014-12 …

[OUTLAW 09]

firn---remember when we talked about 60 being the bottom limit---maybe that 45 is far more accurate right now.


CRUDE OIL BREAKS $60
http://www.businessinsider.com/oil-p...ber-11-2014-12 …

Stress in #Moscow is rising by the minute. WTI crude oil below $60/bbl, Russia 5yr default probability >25%.

pic.twitter.com/5EoB5G6TwS

[OUTLAW 09]

Russia’s effective international reserves only $203 billion as rest of its $409 billion reveres appear to be locked into prtojects/funds.

This would mean Russia has lost this year roughly a 1/3rd of its effective international reserves.

How much liquid - and accessible - foreign reserves does Russia really have? A lot less than you'd think. http://www.economist.com/blogs/freee...hange-reserves …

Today the Central Bank is faced w/ one of the most difficult challenges of the post-Soviet era,
http://daily.rbc.ru/opinions/economi...e596c848d1f91d …

Russians who can't pay off currency mortgages due to ruble collapse protesting: "we/children are homeless debt slaves
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WTI is now at 57 and Brent is at 61.

Oil is falling....
pic.twitter.com/YVq9aC8A3H

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Small sign that just maybe Russia is giving up on their food ban, but just not saying anything in order to not "lose face"?

Gone shopping. At the market they're selling "Spanish Oranges" & "Spanish Persimmon". "Is the ban over?" I ask. "Maybe", winks the seller

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Russia's spectacular failure to maintain its currency's value
http://bloom.bg/1G7kdIe
pic.twitter.com/mB6T2Cmehc

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OPEC willing to see Oil at $40 a barrel? To Russia that would be an act akin to economic war.

http://www.bloomberg.com/news/2014-1...ops-to-40.html …

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Rouble tanking again, hits 59 to the dollar for first time ever and heads towards 60
pic.twitter.com/quoW1OQiyg

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If this rout of the Rubel continues at this pace--Russian default is around the corner. Their CB has nothing left to use effectively to even slow the rout down.

There is only one thing that will effectively stop it--open and visually and verified pull out of the Ukraine--but that means a defeat for Putin and he loses face---that will not happen.

Over 93 for a £
Over 74 for a €
Almost 60 for the US $

pic.twitter.com/PaxOF1syPL

[OUTLAW 09]

If this rout of the Rubel continues at this pace--Russian default is around the corner. Their CB has nothing left to use effectively to even slow the rout down.

There is only one thing that will effectively stop it--open and visually and verified pull out of the Ukraine--but that means a defeat for Putin and he loses face---that will not happen.

Over 93 for a £
Over 74 for a €
Almost 60 for the US $

pic.twitter.com/PaxOF1syPL

Zenrus.ru has added lots of different music and backgrounds, so you can relax to falling ruble in a variety of ways now.