Russia’s Financial Crisis

Dmitry Anatolyevich Medvedev, President of Russia

COGwriter

The credit crunch and lower oil prices are apparently having an effect on Russia’s finances:

Russia lifts rates to 12pc to save rouble as crisis deepens

Russia’s central bank has raised interest rates a full percentage point to 12pc to prevent a collapse of the rouble following a day of mayhem on the Moscow markets, prompting concerns that the financial crisis may be spiralling out of control.

Telegraph – Nov 11, 2008

The surprise move last night came after the authorities had spent $7bn of foreign reserves in a matter of hours trying to defend the currency, at a lower level. The central bank has now spent $84bn of its reserves over the last month.

“The devaluation has begun,” said Lars Christensen, Russia strategist at Danske Bank.

“The rouble has fallen out of its basket against the euro and the dollar. Russia is facing a serious confidence crisis and this could set off a self-fulfilling panic. What is clear is that economy is slowing drastically.”

Chris Weafer, strategist at UralSib, said there were echoes of the 1998 crisis. “If people lose confidence, we could have a massive run on the banks as we saw twice in the nineties: then the game is up,” he told Bloomberg.

Russia is battening down the hatches for a deep slump. It has downgraded is oil forecast to $50 a barrel next year, a level that will play havoc with the state finances. Expecting trouble, the Kremlin has mobilised the police to crush dissent.

“Anti-crisis groups have been set up in the regions to intercept any early indications of destabilisation,” said president Dmitry Medvedev.

“If anyone tries to exploit the financial crisis, the authorities should bring criminal charges. We don’t want a return to the 1990s when everything was seething,” he said.

Donald Jensen, an adviser to the US government, told a Russia Foundation meeting yesterday that the credit crunch posed a grave threat to the Kremlin. “This is pushing the Putin regime towards a crisis. Salaries are being held back and factories are being shut down in major cities. The regime cannot address all the demands that it is faced with,” he said. http://www.telegraph.co.uk/finance/financetopics/financialcrisis/3442376/Russia-lifts-rates-to-12pc-to-save-rouble-as-crisis-deepens.html

12% interest is about 2-4x what the yield is on savings accounts in many major currencies, and much higher than the central bank rates for most major currencies.

This crisis may temporarily slow Russia’s military plans. But it also may lead to increased cooperation with the Europeans as Russian leaders have been vocal in sometimes blaming the USA for this crisis.

Several articles of possibly related interest may include:

Asia in Prophecy What is Ahead for China? Is it a “King of the East”? What will happen to nearly all the Chinese, Russians, and others of Asia? China in prophecy, where?
Russia: Its Origins and Prophesied Future Where do the Russians come from? What is prophesied for Russia? What will it do to the Europeans that supported the Beast in the end?
Anglo – America in Prophecy & the Lost Tribes of Israel Are the Americans, Canadians, British, Scottish, Welsh, Australians, Anglo-Southern Africans, and New Zealanders descendants of Joseph? Where are the lost ten-tribes of Israel? Who are the lost tribes of Israel? Will God punish the U.S.A., Canada, United Kingdom, and other Anglo nations? Why might God allow them to be punished first?
Who is the King of the North? Is there one? Do biblical and Roman Catholic prophecies point to the same leader? Should he be followed? Who will be the King of the North discussed in Daniel 11? Is a nuclear attack prophesied to happen to the English-speaking peoples of the United States, Great Britain, Canada, Australia, and New Zealand? When do the 1335 days, 1290 days, and 1260 days (the time, times, and half a time) of Daniel 12 begin? When does the Bible show that economic collapse will affect the United States?
Europa, the Beast, and Revelation Where did Europe get its name? What might Europe have to do with the Book of Revelation? What about “the Beast”? What is ahead for Europe?