Russia remember has massive mineral wealth and if its population is on the rise then it marks an important milestone.It is alos in proime position to tap the Artic wealth even going by agreed upon intl. regualtions regarding territorial ,continental shelf parameters.The Artic route will also make it easier for its energy to be routed through the pacific waters to Asia.Should a tri-partite oil pipeline (Russia,China India) bring oil to India through Tibet ,this would further bring the 3 giants together in other spheres, BRICS+.It would spell the death-knell of any US sponsored anti-China tilt.The US is doing everything it can to prevent such a triumvirate from emerging.The economic,military,demographic and diplomatic synergy of such a triumvirate would be a v. serious threat to Western US-led hegemony. The other nations of Asia would swiftly follow suit .
Rouble rise prompts hopes that Russian economic crisis is easing
Higher oil prices and Kremlin measures to shore up banks leads to sharp rally in currency ahead of Vladimir Putin’s annual address
http://www.theguardian.com/business/201 ... -intervene
Hopes rose on Wednesday night that Russia might be over the worst of its currency crisis after higher oil prices and measures to shore up struggling banks prompted a sharp rally in the value of the rouble.
Concerted efforts by the Kremlin, the Russian central bank and the finance ministry helped push the currency back to the level at which it started the week, ahead of Thursday’s opportunity for President Vladimir Putin to pronounce on the recent economic and financial turmoil at his annual press conference.
Putin said earlier in the month that a falling rouble was good for the Russian economy, but senior policymakers in Moscow showed on Wednesday how seriously they were taking the threat of a rouble freefall.
Putin’s prime minister, Dmitry Medvedev, sought to assure the country that Russia had the tools to cope with a currency that had fallen below its “comfort” level, while the finance minister said it was buying roubles on the foreign exchanges with $7bn (£4.5bn) of its reserves.
Later, the central bank said it would relax accounting standards, allow banks to disguise the true extent of their losses, and allow them to value their assets in the third quarter of 2014, before the currency turmoil began. There are also plans to pump more capital into the banks during 2015.
Further respite for the rouble was provided when the cost of crude rose by $3 to $63 a barrel following news of lower inventories in the US. In New York trading, it cost just less than 60 roubles to buy a dollar compared to 80 roubles when the sell-off was at its height on Tuesday.
Even so, the rouble has lost around half its value against the dollar since the start of the year and the economic stability that has been the cornerstone of Putin’s promises to the Russian people appears seriously under threat. Analysts say falling oil prices have combined with structural problems and the effect of western sanctions to create a “perfect storm” that has battered the rouble. A hike in interest rates from 10.5% to 17% late on Monday failed to halt the slide, and the central bank has been burning through its foreign currency reserves in at attempt to stem the fall. The central bank has spent more than $80bn in foreign reserves this year propping up the currency.
Shops in Moscow are putting up prices rapidly to keep up with the plummeting rouble, and Apple closed its online shop in Russia. There has been a flurry of retail activity as Russians scramble to buy goods imported before the currency crash and still priced at the old rate. Others cancelled foreign holidays, realising how little their roubles were now worth abroad, while those with euro or dollar mortgages and loans are particularly exposed.
“In the last couple of days several people have come up to me and asked if I could find them jobs abroad,” said one western banker in Moscow. “And I’m talking about people who even a month ago were very patriotic and supportive of everything going on here.”
Kremlin watchers will be looking closely to see if Putin adopts a more conciliatory tone or comes out fighting on Thursdayt. In his state of the nation address earlier in the month, Putin was combative, blaming the west for trying to destroy Russia and justifying the annexation of Crimea as the return of “sacred Russian land”.
Putin’s spokesman, Dmitry Peskov, said the president would not comment on the rouble before his press conference. Earlier this month, he blamed the rouble fall on speculators, whom he said would be identified and punished.
Medvedev said at a televised cabinet meeting on Wednesday: “All the economic and production goals that you have set yourselves, the country has the currency resources to achieve them.”
He added that the government had no plans to use capital controls.
Nicholas Ebisch, currency analyst at Caxton FX, said: “The finance ministry of Russia is now echoing the central bank’s calls that the rouble is undervalued against its major trading partners. This move is the next phase of attempts to strengthen the currency to stop the rouble’s slide, which has alleviated the rouble for the time being, although exchange rates with other currencies remain volatile.
“However, this move is akin to putting a plaster on the wall of a dam that is about to burst.” He said the underlying economic strength of Russia’s economy is still in grave doubt as oil prices slide.
