Russia, the Moscow Stock Exchange and the sharp drop in the ruble – Il Sole 24 Ore

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This article was published on 15 January 2016 at 17:43.
The last change is the January 15, 2016 at 17:46.

“The government has decided to prepare for the worst – the headline in the Russian business daily RBC – but not He knows how. ” Meanwhile, the worst seems closer: for investors, the bond between Russia and oil is immediate. The day after the alarm raised by Prime Minister Dmitry Medvedev, in the wake of all the other markets, the Moscow Stock Exchange reacted to the drop in oil to below $ 30 a barrel (minimum 12 years) with a slip 6% to get to the lowest level since December 17, 2014, to 851.62 points. Gazprom, the world’s largest producer of natural gas, has lost 3.9% after reporting for the third quarter of 2015 a net loss of 2 billion rubles (26 million dollars).

The Russian currency, falling to 77.82 rubles to the dollar in trade with the euro has climbed over the threshold of 85 rubles for the first time since that terrible December 2014, when the Central Bank, to save it, flipped the interest rates of 6.5 percentage points in one night. Since then, Bank Rossii tried to gradually reduce the cost of borrowing and interventions on the ruble, not to drain the reserves.

But the margins for the government Medvedev, which derives from the sale of oil and gas, about half of its revenue, are increasingly close. Vladimir Putin to Medvedev, Anton Siluanov, the Minister of Finance, no longer hides the seriousness of the situation, and the need to meddle in a budget calculated in the autumn on a oil at 50 dollars. Wednesday Siluanov has announced additional spending cuts of 10%, while inflation is close to 13% weigh the sacrifices that the Kremlin – already in election mode, between the year-end parliamentary and presidential elections of 2018 – would have gladly returned. A foretaste of the protests that could follow came yesterday from Sochi and Krasnodar, where groups of pensioners blocked the movement to challenge the reduction of subsidies for public transport.

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