An already shaky Russian economy has been made worse by plummeting oil prices that could cause the Russian economy to recess by 1.2%. Sberbank CIB, Russia’s most important lender, estimates that if the price of crude remains around $90 per barrel that it will shrink, and additional estimates show that if the price of crude drops below $90 and touches $80 per barrel that the economy will further recess. The price of Russian crude is not related to the production thereof. Indeed, Russian oil production has almost never been higher, though the demand for Russian crude following sanctions has dropped rapidly, generating ripples across Central Asia.
The Kremlin is almost certainly sensitive to the impact dropping oil prices will have on the Russian economy, as it currently derives more than 50% of total government revenues from the sector, though sanctions are expected to be more damaging over the long term. Talks to remove sanctions have yet even to be discussed among European and American leaders, though it is unlikely that such a move will be made in the near or medium term, especially on the American side, where lawmakers will be obliged to risk political damage by formally requesting to repeal the sanctions.
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- The Central Election Commission of Uzbekistan registered about 20.5 million voters for the upcoming December Parliamentary elections that will decide the 135 members of the Olij Mazhlis, or the Uzbek lower chamber of Parliament. Thus far, Fergana province has the largest district with 2.34 million registered voters, Samarkand is the second largest with 2.29 million, and Andijan is the third at 1.92 million. Uzbekistan has not allowed opposition parties to nominate candidates.
- The Uzbek terrorist group known as the Islamic Movement of Uzbekistan (IMU) announced its support for the Islamic State of Iraq and the Levant (ISIL, or also known as ISIS). The group’s leader Usmon Ghazi made the announcement late last month via the IMU website. Uzbek security forces said that audio transmissions intercepted by them show some measure of coordination in recruiting and training.
- International banks, despite official blessings, are still reluctant to facilitate humanitarian deals with Iran for fear of being fined ex post facto. Sanctions still allow for trade in humanitarian goods like food and medicine, but banks are fearful of punitive fines from US authorities like the one for $8.9 billion imposed on BNP Paribas, a French bank. Iran has been urging HSBC to process its humanitarian deals that have been frozen due to fear of fines. US officials stress they have expanded licenses for food, agricultural goods, medicine, and medical devices.
- After a week-long plummet in value, the Russian Central Bank moved to fortify the ruble. The ruble has hit record lows almost every day of October, due in part to sanctions but mostly because of sliding oil prices despite larger supply. Sanctions have limited the ability of Russian banks and companies to borrow from abroad, creating a liquidity crunch that has caused the World Bank to slash its economic forecast. The Central Bank promised to channel dollars into the market this year known as foreign-exchange repurchase agreements but acknowledged the need to address rampant inflation, meaning that they still intend to keep the currency at a floating exchange rate.