After Putin’s speech yesterday, the Russian ruble’s precipitous decline has stabilized somewhat. The President of Russia tacitly endorsed the central bank’s policy of interest rate inflation and kept outlook relatively focused on the currency crisis rather than declining government revenues and sanctions. The currency is holding steady right now at 61 rubles on the dollar, and Mr. Putin endorsed the interest rate hike, which, at 17%, is the highest since 2003.
Russian authorities are attempting to ease banking regulations and encourage exporters to sell foreign currency to bolster end of the year retail and trade sales. Impact of new sanctions by the US Congress last weekend were outweighed by a slight rally in oil prices, with Brent crude rising 2.5% to $62.6 a barrel. The Russian economy is still projected to contract next year by 4.5% – 4.7% according to projections by its own central bank.
While levels of desperation have not reached their lowest point, it should be noted that Russian financial authorities were weighing the possibility of forcing export-focused companies to relinquish their holdings of stronger currencies, if only to strengthen exports for the coming year while the currency stabilizes.
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- The European Union announced new sanctions over Ukraine on Thursday, outlawing any foreign direct investment on Thursday in Crimea. These new measures restrict or ban investment, trade, and tourism, and do not strike Russia’s economy as a whole. Thus far they are far more modest than the new round of American sanctions mandated by the passage of a bill last Saturday in Congress. The EU’s foreign policy speech, Federica Mogherini, said that Europe had no interest in aggravating financial turmoil in Russia.
- Peabody Energy Corporation and a small group of bidders like the consortium consisting of Energy Resources, China Shenhua Energy Company, and Sumitomo Corporation are the last remaining bidders in line to develop Tavan Tolgoi, the largest Mongolian coking coal deposit. Tavan Tolgoi holds some 7.4 billion tons of coal in deposits. This will potentially be on the largest sources of wealth for the Mongolian government in recent years, and the working group will make a decision “soon” according to Former Prime Minister Enkhsaikhan Mendsaikhan.
- China’s most senior judge, Zhou Qiang, urged lawmakers and ajudicators in Xinjiang to crack down “harshly and quickly” on cases involving terror attacks, national security, and social stability in Xinjiang province. “We must increase guidance levels for trials, and guide Xinjiang courts to harshly and quickly hear terror crime cases like those which threaten national security, damage ethnic unity and affect social stability,” he said in an official statement, adding that cases involving race and religion must be handled “appropriately.”
- The Organization for Security and Cooperation in Europe (OSCE) is assisting the Turkmen government with improving airport security and border controls. The seminar was a two day training session and focused on biometric documents and identification. Experts from Australia, France, the Netherlands, and Singapore all made presentations about international best practices.
- Azerbaijan border guards held tactical exercises in the Caspian Sea supposedly to enhance border search, detection of terrorist and subversive groups and neutralization of day and night firings from rocket-artilleries in case of threat to oil and gas infrastructure. Two patrol boats that were recently constructed carried out anti-aircraft artillery and missile exercises.