LIVE UPDATES: Russian opposition leader Mikhail Kasyanov has been attacked for the second time this month as he traveled to meet with reporters.
Welcome to our column, Russia Update, where we will be closely following day-to-day developments in Russia, including the Russian government’s foreign and domestic policies.
The previous issue is here.
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UPDATES BELOW
Since Zenrus is just as tongue-in-cheek as it is useful, let’s dig deeper on the latest economic news from Russia. US News & World Report writes that the ruble, which fell 2% today against the dollar, is in an awkward spot — low enough in value to hurt the Russian economy, not low enough to boost the value of anything exported and priced in dollars, like energy, specifically oil:
Economists say the ruble still has not fallen low enough to help government finances, which have been hurt by the collapse in oil prices. A weaker ruble helps boost state coffers because the state gets its oil revenue in dollars.
Central Bank chief Elvira Nabiullina rejected Thursday reports that authorities may welcome the depreciation of the ruble in order to help state finances.
As of writing, the ruble is trading at 80.39 to a dollar, a loss of 1.43% today, and a shocking 91.36 to a single euro, a drop of nearly 3% since markets opened this morning. Because the dollar has weakened somewhat in the last month, the ruble is not at an all-time low when priced in dollars, but take a look at the five-year chart when pricing the ruble in euros, and the depth of today’s news becomes clear:
Oil briefly rallied today, but then fell back down because long-term outlook is very poor. Reuters reports:
“We’re grinding lower on bearish fundamentals,” said Bjarne Schieldrop, chief commodity analyst at SEB in Oslo.
“There’s a price fight within OPEC for Asian market share, and there are worries that storage capacity is going to be breached.”
He added that oil’s fall was also part of a general move in global markets away from riskier assets. Investors flocked to safe haven assets such as gold, the Japanese yen and top-rated bonds.
Despite the report of talks, competition between OPEC members still appears to be fierce, with producers fighting for market share by lowering prices as Iran offered its crude to Asia at a discount to rival OPEC producer Saudi Arabia.
One reason for the recent drop — it’s becoming clear that more barrels of oil have been stockpiled by both governments and investors than the market previously believed, and there are fears that there is no more room to stockpile oil which, if true, could simultaneously significantly drop demand while increasing supply. If investors stop buying up oil to stockpile, though, it could have the added effect of stabilizing the price. The problem — the price could be stabilized lower than it currently is.
Some analysts had predicted that if oil could reach $34 a barrel then the price could stabilize and rally further. But since hitting more than $35 a little more than a week ago, it has lost $5 a barrel.
The Russian government’s 2016 budget, which relies heavily on oil, was set with the expectation that oil would be $50 a barrel, but so far this year it has averaged in the high twenties.
— James Miller
Mikhail Kasyanov, former finance minister and now the chair of Parnas, an opposition party, has been targeted once again, this time by ultra-nationalists from the National Liberation Movement (NOD), followers of conservative conspiracy ideologue and Duma deputy Evgeny Fyodorov of the United Russia party.
Kasyanov was in the city of Vladimir this morning for a meeting with local journalists, reports the state-owned TASS news agency.
According to TASS, no eggs actually struck the co-chairman of the Parnas party, who was mobbed by a group of Chechen men at a restaurant on February 9.
The NOD protesters laid out a red carpet for Kasyanov, festooned with dollar bills, to suggest that the opposition politician receives US funding.
On the placards held by the protesters were slogans such as:
“Motherland! Homeland! Putin!”
“WE WILL STAND For the defense of the Motherland! From words to action.”
“MISHA, WHEN IS YOUR CHARTER TO WASHINGTON?”
“Misha is the puppet. Where is the puppeteer?”
The NOD activists then chanted “Kasyanov is a traitor” before his arrival.
— Catherine A. Fitzpatrick & Pierre Vaux