Wednesday, December 17, 2014

Russia Economic Crisis

Russia hiking their interest rate failed to rescue the free-falling rouble and it may lead to full-blown currency crisis. Russian Central Bank had an emergency midnight meeting and raised their interest rates by 6.5%.

Deputy governor of Russia’s central bank Sergei Shvetsov said “Believe me, the choice that the central bank council made yesterday was a choice between the very bad and the very, very bad.” They don't have a choice but push the economy closer to a deep slump by hiking borrowing costs, they just could not sit back and do nothing as the rouble slump further.

Shvetsov added that, it was just a very bad day.

Their strategy to shock the interest rates up from 10.5% to 17% in one go was a one big flop. The Russian currency ended another turbulent day’s trading below where it started and plumbed new record lows against the US dollar. Russia has been spending the past nine months fighting an economic war against the US and Europe's selfish sanctions. This Tuesday December 16 they clearly lost.

Russia should say what the hell and begin dumping US Debts and US dollars and take everyone with him.

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