The failure to agree with the Saudis on sustaining an agreed price for oil on world markets that led to a massive drop in the oil price was bound to hit the value of the rouble and no amount of assurance that Moscow knew what it was doing has made any difference.

The alarm is being sounded that Russia is back to the credit crisis of 2014 as the authorities are unable to push the rouble back up. At a time when the rate is 75 roubles to the dollar, “Investors flee the falling rouble” is the headline in Nezavisimaya gazeta. As if to underline Russian vulnerability, the Americans are now sanctioning another “daughter” company of Rosneft – TNK Trading International of Switzerland – for selling Venezuelan oil embargoed by the US Government, which makes it toxic for potential business worldwide, certainly for any contact with American enterprises.

In an international economy hit and increasingly crippled by the Wuhan coronovirus, capital flight is likely to continue. On 18 March Vzglyad ru was speculating on the idea that the rule would continue to drop from 80 roubles to the dollar if the oil price tanked at 20-25 dollars a barrel. The Central Bank is somewhat akin to Hercules at the moment and for the foreseeable future, holding up the Russian globe.

12.03.2020 20:47:00