News: Russia economy collapses; officially in recession

TheSoneNavy

Quote:

A deep recession is now a certainty for Russia in 2015. Things could get much worse

IN THE world of central banking slow, steady and predictable decisions are the aim. So when bankers meet in the dead of night and raise interest rates by a massive 6.5 percentage points it suggests something is going very wrong. It is: the Russian currency crisis many feared is now a reality and the mood in Moscow close to panic. Russians are right to worry: they are heading for a lethal combination of deep recession and runaway inflation.

Many of Russia’s woes start abroad. The country is highly dependent on its oil-and-gas firms. Hydrocarbons contribute over half the federal budget and two-thirds of exports. The state owns big stakes in many energy firms, as well as indirect links via the state-supported banks that fund them. The oil price has fallen by almost half in the past six months—it dropped below $60 this week, its lowest level since the depths of the financial crisis. The rouble has followed oil down.

Yet the crisis has now become more general. On December 15th Brent crude barely budged—it dropped by 1%—but the rouble plummeted, losing 10% of its value against the dollar, the worst drop since the previous rouble crash in 1998. The Central Bank of Russia is thought to have intervened, using $2 billion to buy roubles. This did not work, and nor did the midnight rate hike: the rouble lost more than 11% on December 16th.

The dollar-debt problem will get worse. Credit-rating agencies including Standard & Poor’s and Fitch were already pessimistic about Russia. With the central bank forecasting a 4.5% drop in GDP in 2015 a downgrade is a certainty. If debt is reclassified as junk, Russia’s investor base will shrink. The volume of debt may jump too. The blurred lines between the state and Russian firms mean the Kremlin may end up on the hook for much of the $614 billion in external debt owed by banks and other firms. No wonder confidence in the prop provided by the Kremlin’s foreign-exchange reserves, officially valued at $370 billion, is draining.

A WHOLE lot more at http://www.economist.com/node/21636720

Oh no

LovingYourCareer

They sucked anyways.

bitch.

Caesar

thank god

Element

The gays their power. First Gaga, now Russia.

iHype.

Maybe they should legalize gay marriage and get dem coins.

Taste of Honey

Of course it would. The sanctions that the EU and the U.S. put on Russia over Ukraine and Crimea are starting to bite too.

TheSoneNavy

Quote:

Originally posted by #lovecoldplay

They sucked anyways.

bitch.

jonasha

Oop.

The gays not spending they coins.

Sunderland 4ever

Wow. I hope they can recover.

Newt

The fact that I get satisfaction from this

Infinite

I hate russia so much! and the rude people that live there

Reinvention

Quote:

Originally posted by Newt

The fact that I get satisfaction from this

Quote:

Originally posted by Infinite

I hate russia so much! and the rude people that live there

Most of the country are perfectly innocent, kind people like you and I that will now suffer because of their country's economic situation and dictator-like leader. Educate yourselves.

MAKSIM

Y'all are terrible. Youre acting like this is a complete blow to Putin when it is a complete blow to every person inside Russia. My friend can no longer travel outside of Russia this January because her rubles, which were 800 euros, became 400 euros over night. American students who will be returning from studying/working in Russia will receive 1/2 the compensation/exchange when they convert their rubles. I was in Russia around this time last year working there and had to exchange 4,000 dollars worth of rubles....if I did all that work for a couple of months only to receive 2,000 dollars I would be pissed.

liberalmusiclover

Quote:

Originally posted by Element

The gays their power. First Gaga, now Russia.

Ddddddd

Rated R

I feel bad for the innocent civilians in Russia but karma is a biT of a bitch to Putin and their trash leaders

CakeLike

Watch them blame the gays for this somehow

Solopop

I don't feel bad, these 'citizens' willfully elected a horrible man with little regard for human life or international peace. Putin is a **** and Russia deserves what they get.

MaRy

Rama

The ignorance in this thread lol

They'll be fine, and I hope so because they're one of our main buyer countries

inspiration4

Quote:

Originally posted by L/\DY G/\G/\

Y'all are terrible. Youre acting like this is a complete blow to Putin when it is a complete blow to every person inside Russia. My friend can no longer travel outside of Russia this January because her rubles, which were 800 euros, became 400 euros over night. American students who will be returning from studying/working in Russia will receive 1/2 the compensation/exchange when they convert their rubles. I was in Russia around this time last year working there and had to exchange 4,000 dollars worth of rubles....if I did all that work for a couple of months only to receive 2,000 dollars I would be pissed.

Why on earth would you not convert most of your income immediately? Especially if it's rubles!?

It seems like a better idea to convert most and keep it in a US bank account, only leaving a necessary living amount in rubble.