Russian rouble now worth less than a penny or euro cent

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Maledict said:
From the telegraphs lives blog:

12:12 We're there. One euro cent is equal to one rouble. And one dollar will now get you 80 roubles.

12:06 Another low of the day for the rouble. A dollar will now get you 77.2 roubles.
Yesterday, the rouble and a penny hit parity (£1 would grab you 100 roubles). Today it looks like we're about to see something similar.
The euro is rapidly approaching 100 roubles. Will we see the euro cent equal to the rouble by the end of the day?
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Fascinating to watch how 'end of the day' turned out to actually mean six minutes later...
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Figured it'd be nice to get its own thread so people can tell us what this means for the rest of us.

I'm glad our sanctions are bringing the hurt on Russia and that oil isn't so absurdly overpriced, but I assume this will have wider negative repercussions.
 
This is amusing:

Analysis: Stephen Ennis, BBC Monitoring Russian Media Analyst

Yesterday's rouble crash caused barely a ripple on Russia's primetime news last night.

Bulletins on the three main channels on 15 December led with a health scare for a famous poet and the aftermath of the siege in Sydney. Official channel Rossiya 1 ignored the rouble completely, while state-controlled Channel One and Gazprom-Media's NTV both dedicated around a minute to the story - in NTV's case close to the end of the hour-long bulletin.

Channel One used a somewhat misleading screen graphic that understated the currency's collapse. It also warned that shops displaying prices in any other currency than the rouble could face stiff fines.

The rouble had fallen by more than 10% on the day.

The last time state TV tried to hush up such a dramatic and nationally important event was when all three main channels completely blanked the protests that followed the disputed parliamentary election in 2011.
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http://www.bbc.co.uk/news/business-30492518

Their economics article doesn't say much apart from stating the obvious (sanctions & oil prices the cause, Russia hemorrhaging cash the result).

http://www.bbc.co.uk/news/business-30491170
 
Yeah, yesterday was a very bad day for Russia. That interest rate jack is going to be awful for their growth and OPEC isn't helping. Would not be surprised to see them serenading IMF soon.
 
I hope they're Putin some money aside...
 
maxcriden said:
Their economy's in some serious rouble at this point.
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I wonder if the public there is going to blame Putin or the West... Either way, it's going to be ugly and some miserable time ahead for Russians.
 
I don't think we'll see any wide spread repercussions from the oil price plummet from Russia quiet yet. The rouble wasn't all that valuable compared to the dollar or euro a year ago anyway... but it's lost about half it's buying power over the last 8 months going from 35 roubles per dollar to the, as you mentioned, 100 roubles per dollar (72 currently).

It's not like it's Western sanctions that are doing this, it's Saudi Arabia. So I'm not sure what repercussions you'd expect besides more political unrest that's quickly snuffed out. It'll take a lot more than a 100% devaluing of the Rouble to cause a stir in Russia's political landscape.

maxcriden said:
Their economy's in some serious rouble at this point.
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Ya should have left this one on the cutting room floor.
 
Stet said:
Just like Weimar Germany!
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Yeah, while I can't help but smile at this happening after all the Russia STRONK since the mess in Ukraine started, this not what I wanted. I was happy with the measured sanctions we imposed because it avoided a situation like this - calling Russia a bear is pretty apt, and you don't wound a bear.

If this is more or less coincidental due to OPEC manipulating the oil price due to their own designs I'm all for opening up the possibility of reversing the sanctions altogether if Russia gets hit too hard. The last thing we need right now is being perceived as waging a trade war against Russia. The risk of it escalating into a shooting war is simply unacceptable.
 
I wonder where all the US Conservative praise for Putin being a "dominant and powerful leader" is now? Because his power play has not brought Russia anything that good so far.
 
Randam said:
So how much is a rouble supposed to be?
Around the same as dollar and euro?
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Earlier this year (march) you could get 30 roubles per dollar, historically low compared to the early 2000s.

(But the early 2000s aren't a good indication because Russia was manipulating their currency)

30 roubles per dollar has been the norm for the better part of 5 years.
 
There was a fascinating article I read about how so many people assume that if you hurt Putin's economy enough with sanctions, that the moneyed interests in Russia - the oligarchs - would put a stop to him, much like they helped him to power.

But the author surmised that'd be significantly less likely to happen after the early power struggles between Putin and the Oligarchs led to a sort of bargain where he demanded their alignment with government interests. Then relatively recently, with the arrest of one of Russia's richest men as well as other factors, suggest the struggle is becoming more pronounced and Putin now sees the oligarchy as a far less abstract threat as the economy continues to stumble.

It's going to be fascinating what plays out. Putin now relies significantly on nationalistic furor for his popularity, and how long is that going to last as ordinary Russians begin to see their individual small wealth evaporate? Will the oligarchy try to take Putin out? Will there be another rise of demonstrations, further destabilizing the country?

Who knows when Putin is the leader...
 
FreezeSSC said:
Time to buy the rouble for the inevitable bounce?
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Use oil, not the rouble, if you want that play. Too much additional country risk brought in. At some point Russia's problems could lead to a run on the banks, a flight to other currencies, and the stop of business in the rouble. Relief from OPEC and US producers is highly unlikely. North America becoming practically energy independent and an energy exporter is the most transformational occurrence of this decade.

Oil is now way way below the needed price to prop up the economies of Iran and Russia. Admittedly, even US producers are likely hurting at the current price, but our break even is still well below the necessary level for Russia and Iran. it's now just a matter of running out the clock to squeeze these two.

We'll debilitate the Revolutionary Guard and Putin in one fell swoop.

Thanks Saudi Arabia for not cutting production *wink wink*
 
Amir0x said:
It's going to be fascinating what plays out. Putin now relies significantly on nationalistic furor for his popularity, and how long is that going to last as ordinary Russians begin to see their individual small wealth evaporate?
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That's easy, blame it on outside countries attacking poor Russia because they're jealous. And the Jews.
 
Russia is not isolated yet, and they are in bed with China for now... they will likely circumvent SWIFT and dollars altogether, and who knows if/when they will decide to peg their currency to something.

These are historic times in finance, and Russia being in trouble is just the start. The one certainty is that war will happen between Ukraine/NATO and Russia. Ukraine has no choice, hence Europe will have no choice.
 
Jackpot said:
That's easy, blame it on outside countries attacking poor Russia because they're jealous. And the Jews.
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well sure, but then the people eventually is going to demand an answer to those countries attacking poor Russia. Putin will have to find a solution eventually, because there's only so many 'the West would find some other excuse if not Crimea to damage our interests' statements he can make before things are bad enough that nothing he can say will stop things from spiraling out of control.
 
My gf's dad has been working in Russia for years, getting paid in Euros. Hasn't been paid for the last 3 months as didn't want it in Roubles. Now he's heading back to Greece to find work. Gives you an inkling of how fucked Russia is that somebody is returning to Greece to find work.
 
Don Chalupa said:
These are historic times in finance, and Russia being in trouble is just the start. The one certainty is that war will happen between Ukraine/NATO and Russia. Ukraine has no choice, hence Europe will have no choice.
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Are we talking trade stuff, or real war? Nothing is going to happen. Europe is not going to war, Russia is not going to attack NATO.
 
Don Chalupa said:
Russia is not isolated yet, and they are in bed with China for now... they will likely circumvent SWIFT and dollars altogether, and who knows if/when they will decide to peg their currency to something.

These are historic times in finance, and Russia being in trouble is just the start. The one certainty is that war will happen between Ukraine/NATO and Russia. Ukraine has no choice, hence Europe will have no choice.
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War between Russia and NATO is more likely than not the literal end of the world. It is highly unlikely no matter what happens - especially since Russia knows they can't win and NATO has no interest in starting anything.

War between Ukraine and Russia also seems unlikely because neither side stand to gain. It would require an utterly moronic Ukraine or a completely desperate Putin to alter that equation. And in either case, NATO wouldn't intervene.
 
Don Chalupa said:
Russia is not isolated yet, and they are in bed with China for now... they will likely circumvent SWIFT and dollars altogether, and who knows if/when they will decide to peg their currency to something.
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China likes money. If Russia has no money, tough luck Russia.
 
Joni said:
China likes money. If Russia has no money, tough luck Russia.
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Yeah in any choice between the US and Russia, China would choose the US for its own economies sake. Now Chinese businesses have first sniff at buying up Russian concerns if things get real bad in Russia which China is probably really happy about also.
 
Joni said:
China likes money. If Russia has no money, tough luck Russia.
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China likes gas too, and natural resources,,, and Russia is their closest best friend.

Nivash said:
War between Ukraine and Russia also seems unlikely because neither side stand to gain. It would require an utterly moronic Ukraine or a completely desperate Putin to alter that equation. And in either case, NATO wouldn't intervene.
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I think we will have a completely desperate Ukraine, and a reactive Russia. The issue originally was about gas going through Ukraine (hence the rest of Europe) and the West wanting to control that. The issue is still at play, and all it takes is one misguided move to get the real conflict going.

Most economies are sinking into a currency war against each other, and history says a military conflict usually follows. We'll see,
 
Joni said:
China likes money. If Russia has no money, tough luck Russia.
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Russia and China aren't buddys, more liked a forced opposition to the west powers. And I heard China didn't like at all what Russia did to Crimea. Or for Crimea in that case.
 
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