The combination of lower oil prices and international sanctions due to the Crimea theft have led to the fall of the ruble to the dollar. Now riding at about 60 to the dollar it has lost half is value in a year. Russia's central bank has responded with some economic measures to bolster the ruble, but will have other negative impacts.
A last-ditch attempt to defend the exchange rate by raising interest rates to 17pc failed within hours, yet the shock is surely enough to set off a chain of corporate failures and push banks over the edge.
And CNN reports over the weekend an interview with Saudi oil minister Ali al-Naimi.
"If they want to cut production they are welcome, we are not going to cut, and certainly Saudi Arabia isn't going to cut," al-Naimi said. " [That] position we will hold forever, not [just] 2015."Russia is in a tough pickle. There is no oil price relief in sight. There is little Russia can do to relieve sanctions except withdraw from the Crimea. There may be some room for negotiation around the cease fire already negotiated but not adhered to, but at this point I think there is a credibility issue that will result in no quick easing of sanctions. Russia's internal economy is weak due to an over reliance on oil and mineral exports. Hopefully for the sake of the world economy Putin will come to the table and work out a win-win and hang up his nationalistic saber.
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