russia just raised interest rates 6.5%

[chad]

from 10.5% to, boom, 17%. boom.

[Cebu_4_2]

um... no.

[Cebu_4_2]

Russia unexpectedly raises interest rates

Published time: April 25, 2014 13:35 Get short URL (http://rt.com/business/154840-russia-rates-cbr-ukraine/)

http://img.rt.com/files/news/25/cd/80/00/russia.si.jpg
Head of Russian Central Bank Elvira Nabiullina (RIA Novosti/Vladimir Fedorenko)

Tags
Banking (http://rt.com/tags/banking/), Interest Rates (http://rt.com/tags/interest-rates/), Russian economy (http://rt.com/tags/russian-economy/)

The Central Bank of Russia has unexpectedly raised its key interest rate to 7.5 percent, despite earlier saying it wouldn’t change until June. Aimed at trimming inflation, it means more expensive loans and slows an economy that’s already losing steam.

The rate went up 50 basis points. The last time it was bumped up was in March to 7 percent, a 1.5 rise from the previous 5.5 percent rate.
Bank Chair Elvira Nabiullina (http://rt.com/business/russia-central-bank-chairmanship-nabiullina-156/) previously said the institution would refrain from changing rates until the June meeting.

On its website the Bank gave a traditional explanation, saying the move will help keep the necessary balance between inflation and economic growth.
“The adopted decision on the key rate would ensure a decline in inflation to no more than 6.0% by the end of 2014 and help to maintain the appropriate balance of inflation risks and the risks of further economic slowdown,” it said in a statement (http://www.cbr.ru/eng/press/pr.aspx?file=25042014_1335371.htm).
http://rt.com/files/news/25/cd/80/00/rates-1.jpg
The weakening ruble is another concern for Russia’s Central Bank. The ruble is the worst performing Emerging Markets currency and has lost over 8.5 percent against the dollar in 2014. On Friday the Bank set the ruble at 34.6830 against the dollar and 49.3175 against the euro. Combined the overall USD-EUR currency basket against the ruble was 42.1245.

However, the CBR also acknowledged that the economy is poised to slow during the year, citing “uncertainty about the international political situation.”

“Besides, weak economic activity in most countries which are Russia’s trading partners, restrains the economic growth of Russia,” it added.
Inflation vs. growth

In February inflation was calculated at 5.6 percent, and by March it had accelerated to 6.0 percent, both well above the Bank’s target rate of 5 percent. The Bank said it doesn’t plan to cut rates again in the next few months.

The CBR hopes to contain inflation below the target rate of 5 percent by the end of 2014, a task difficult under present “unfavorable market conditions” such as the slowing economy and weak ruble.

On April 21, the Central Bank calculated consumer prices has increased 7.2 percent, or about 0.2 percent per week.
Political tension over Ukraine has dragged down economic forecasts for Russia. While the Finance Ministry expects Russia to grow 2.5 percent in 2014, the IMF has slashed (http://rt.com/business/imf-russia-2014-forecast-189) its estimate to 1.3 percent citing geopolitical risks. ().

Prime Minister Dmitry Medvedev said Russia faces ‘unprecedented’ (link) economic challenges.
However, high oil prices continue to have a stabilizing effect on the domestic economy and state finances. Oil and gas export revenues account for more than half of the Russian budget.

The Bank’s Board of Directors will next convene on June 16 and will again discuss interest rates.
The decision came the same day Standard & Poor’s downgraded (http://rt.com/business/154592-standard-poor-russia-rating/) Russia’s credit rating for the first time in 5 years, bumping it down to near junk status.

Economic Minister Alexei Ulyukayev said the move was "expected" yet "politically motivated."

[chad]

yep! get ready boys!

http://www.cnbc.com/id/102264517

http://www.bbc.com/news/business-30490082

http://www.businessinsider.com/russia-raises-rates-2014-12

http://www.foxbusiness.com/economy-policy/2014/12/15/russian-raises-key-interest-rate-to-17/

http://www.wsj.com/articles/russias-central-bank-raises-key-rate-to-17-1418682581

[Cebu_4_2]

So who is right? RT vs MSM

[chad]

don't know, but that article you posted is from april, so i know that isn't current. it's all over zerohedge and the financial times of london as well. who knows anymore, eh? the daily propaganda is everywhere.

[Cebu_4_2]

So say it was 7% in April and they boosted it 6.5% x 7% would be .455% That would be 7.455% unless they claim they added 6.5% to the 7% = 13.5%

More importantly what purpose is this distraction?

[osoab]

So say it was 7% in April and they boosted it 6.5% x 7% would be .455% That would be 7.455% unless they claim they added 6.5% to the 7% = 13.5%

More importantly what purpose is this distraction?

it wasn't 6.5% more based on the current figures. they raised the rate 650 basis points. one hundred basis points = 1%

purpose = bring in more capital and trying to keep the ruble/dollar rate steady. the ruble/dollar spread has been increasing since the beginning of the oil plunge


http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2014/12/20141215_RUB_0.jpg



http://www.zerohedge.com/sites/default/files/pictures/picture-5.jpg (http://www.zerohedge.com/users/tyler-durden)
Russia Shocks With Emergency Rate Hike, Boosts Interest Rate From 10.5% To 17% (http://www.zerohedge.com/news/2014-12-15/russia-shocks-emergency-rate-hike-boosts-interest-rate-105-17)Submitted by Tyler Durden (http://www.zerohedge.com/users/tyler-durden) on 12/15/2014 - 17:05 http://www.zerohedge.com/sites/default/files/imagecache/fp_thumb/images/user3303/imageroot/20141215_RUB1m.jpg (http://www.zerohedge.com/news/2014-12-15/russia-shocks-emergency-rate-hike-boosts-interest-rate-105-17)Following the biggest rout to the Ruble in ages, Russia - unlike Mario Draghi - instead of talking the talk decided to walk the bazooka walk and shocked all those long the USDRUB by unleashing an emergency rate hike (at 1 am in the morning) from the recently raised interest rate of 10.50% to... hold on to your hats... 17.00%, a 650 bps increase!





The Board of Directors of the Bank of Russia has decided to increase from December 16, 2014 the key rate to 17.00% per annum. This decision was driven by the need to limit significantly increased in recent devaluation and inflation risks.



i think i read on zerohedge last week that moscow hookers increased prices by 100%
(http://twitter.com/share)

[Serpo]

Bank of Russia hikes rate to aid sinking currency Created: 12/15/2014 4:21 PM
By: By JOSH BOAK
WASHINGTON (AP) — The Bank of Russia has drastically raised its key interest rate to 17 percent from 10.5 percent to try to boost its currency, which has been plunging along with oil prices.
The moves comes after the ruble has shed roughly 50 percent of its value since January, battered by Western sanctions imposed over the conflict in Ukraine and a huge drop in the price of oil. A falling ruble threatens to send inflation in Russia to dangerously high levels.
The struggling Russian economy is highly dependent on petroleum revenue. The average price of a barrel of oil has dropped to just under $56, down from a summer high of $107.
The Russian government recently downgraded its growth forecast for next year, predicting that the economy will sink into recession.
(Copyright 2014 by The Associated Press. All Rights Reserved.)

http://www.kob.com/article/stories/S3650442.shtml?cat=602#.VI90LnurGDY

[Cebu_4_2]

i think i read on zerohedge last week that moscow hookers increased prices by 100%
(http://twitter.com/share)

Now we know the reason for the distraction!

[Hitch]

Isn't this the effect of economic warfare? How long before Putin reacts? He's got to be pissed.

[old steel]

now we know the reason for the distraction!

Still a heck of a deal!

[Cebu_4_2]

Isn't this the effect of economic warfare? How long before Putin reacts? He's got to be pissed.

This is simply a chess game and I think Putin is a bit sharper than his foes.

[osoab]

we should also remember that wilver followed oil down again today, hard.

[Hitch]

This is simply a chess game and I think Putin is a bit sharper than his foes.

That's exactly my concern. What do you think we can expect going forward from Russia? Putin ain't no pussy. The oil price slam, now his currency weakened and looking at a recession, he's going to retaliate. Like Chad said, get ready, folks.

[osoab]

one theory


http://www.zerohedge.com/sites/default/files/pictures/picture-5.jpg (http://www.zerohedge.com/users/tyler-durden)

What America Does Not Understand About Russia & Oil (http://www.zerohedge.com/news/2014-12-15/what-america-does-not-understand-about-russia-oil)

Submitted by Tyler Durden (http://www.zerohedge.com/users/tyler-durden) on 12/15/2014 - 19:20
http://www.zerohedge.com/sites/default/files/imagecache/fp_thumb/images/user3303/imageroot/20141215_RubleCrude.jpg (http://www.zerohedge.com/news/2014-12-15/what-america-does-not-understand-about-russia-oil)

As hard as it is to believe - given the strength of the "Russia-is-doomed" meme - Crude oil prices for Russia (in Rubles) are unchanged since February... This is important as all costs are Ruble denominated while revenues are USD denominated, leaving Russian oil companies’ margins insulated despite the dollar decline in price. In addition, the Russian government is easing the export taxes which further improve the profitability of Russian oil. So as US Shale Oil sector is destroyed by its USD costs, it appears Putin's core energy industry is somewhat insulated... and America's late-80s "defeat The Soviet Union" playbook is failing.




but this makes me think that this has always been baked in.


http://www.zerohedge.com/sites/default/files/pictures/picture-5.jpg (http://www.zerohedge.com/users/tyler-durden)

The First Sellside Reactions Trickle In: "17% Rate Hike Not Enough" According To Citi, JPM (http://www.zerohedge.com/news/2014-12-15/first-sellside-reactions-trickle-17-rate-hike-not-enough-according-citi-jpm)

Submitted by Tyler Durden (http://www.zerohedge.com/users/tyler-durden) on 12/15/2014 - 19:50

http://www.zerohedge.com/sites/default/files/imagecache/fp_thumb/images/user5/imageroot/elvira%20nabiullina.jpg (http://www.zerohedge.com/news/2014-12-15/first-sellside-reactions-trickle-17-rate-hike-not-enough-according-citi-jpm)

Two short hours ago Russia shocked everyone with an unprecedented rate hike sending the nation's various interest rates some 650 bps higher. Well, according to the initial sellside responses, as shocking as the move was, it is not nearly enough.

[Cebu_4_2]

That's exactly my concern. What do you think we can expect going forward from Russia? Putin ain't no pussy. The oil price slam, now his currency weakened and looking at a recession, he's going to retaliate. Like Chad said, get ready, folks.

No idea how he will play it but if I was him I would target the powers not the people. I have read translated scripts that say he knows that the people have no control of the powers that be and he acknowledges this. I can't play chess at all but I am good at checkers... :D

[mick silver]

will this drive the interest rates up around the world if not what good will it do for putin . I have seen that he making big oil deals would this not hurt them . ?

[EE_]

I'm not sure, but it seems Wall Street/central banks are not happy with Putin's move.

I think I understand it that Russia has no debt in rubles, in fact it has a surplus.
All Russia's debt is in dollars, or foreign currencies.

I'm guessing by what I'm hearing, that the West and the Fed were hoping Putin would bail out the ruble with his reserves.
He did not and instead raised interest rates.

It was mentioned that if Obama and the Fed wanted to hurt Putin right now, they would raise interest rates in the US.
This statement to me is a tell that Putin is not doing what the western jew bankers had hoped.

The word is, Russians still support Putin 100%.
It's reported that the Russian people are buying everything they need as fast as they can, in case the ruble falls further.

[osoab]

The ruble getting monkey hammered again this morning. Erased everything the CBR did with their rate hike.


http://www.zerohedge.com/sites/default/files/pictures/picture-5.jpg (http://www.zerohedge.com/users/tyler-durden)

Turmoil Spreads: Ruble Replunges, Crude Craters, Yen Surges, Emerging Markets Tumbling (http://www.zerohedge.com/news/2014-12-16/turmoil-spreads-ruble-replunges-crude-craters-yen-surges-emerging-markets-tumbling)

Submitted by Tyler Durden (http://www.zerohedge.com/users/tyler-durden) on 12/16/2014 - 06:39
http://www.zerohedge.com/sites/default/files/imagecache/fp_thumb/images/user5/imageroot/hands%20on%20face.jpg (http://www.zerohedge.com/news/2014-12-16/turmoil-spreads-ruble-replunges-crude-craters-yen-surges-emerging-markets-tumbling)

For those wondering if the CBR's intervention (http://www.zerohedge.com/news/2014-12-15/russia-shocks-emergency-rate-hike-boosts-interest-rate-105-17)in the Russian FX market with its shocking emergency rate hike to 17% overnight calmed things, the answer is yes... for about two minutes. The USDRUB indeed tumbled nearly 10% to 59 and then promptly blew right back out, the Ruble crashing in panic selling and seemingly without any CBR market interventions, and at last check was freefalling through 72 74 76, and sending the Russian stock market plummeting by over 15%.

[EE_]

The ruble getting monkey hammered again this morning. Erased everything the CBR did with their rate hike.

Is it possible there will be a delayed reaction? Maybe Putin has another big move in store?

Could this be the beginning of bank runs globally?

http://itmakessenseblog.com/files/2013/03/bank-run.jpg

http://www.silverdoctors.com/wp-content/uploads/2012/11/bank.jpg

[mick silver]

Russian stock market plummeting by over 15%. if there markets took a hit what would keep other markets from taking a hit also ? global market

[chad]

i don't have tv, but i was watching bloomberg live streaming. they had some rt lady, a bloomberg guy, some guy from ft, and some random analyst lady. they all agreed that 17% is not enough to save the ruble from crashing, and that in reality, russia needs to raise it to around 40% or even 50%. they al agreed the ruble is going to crash and that everyone there is going to get wiped out.

not sure what this means for the rest of us.

[EE_]

i don't have tv, but i was watching bloomberg live streaming. they had some rt lady, a bloomberg guy, some guy from ft, and some random analyst lady. they all agreed that 17% is not enough to save the ruble from crashing, and that in reality, russia needs to raise it to around 40% or even 50%. they al agreed the ruble is going to crash and that everyone there is going to get wiped out.

not sure what this means for the rest of us.

http://moneymorning.com/wp-content/blogs.dir/1/files/2013/07/Gold-going-up-Q.jpg

http://thumbs.dreamstime.com/z/stack-gold-coins-symbol-ruble-isolated-background-officially-recognized-graphic-image-russian-35998127.jpg

[Twisted Titan]

Russia will get this to stablize because if they dont

who is in their right mind believes that if the russian domino falls the US domino will still be standing??

[Twisted Titan]

Just a wild thought.........

if a understanding this article correctly a russian bank are paying 17% interest on accounts meanwhile a american account are paying .09%

you do the math and get back to me.

[osoab]

Nice rebound for black gold. Wilver still getting beat like a red-headed stepchild.

[monty]

Yes, And I just bought some. I'm thinking I should haven waited longer.