Russian Ruble Crashes To Record Lows In "Panic": "Some Investors Are Selling At Any Price"

Tyler Durden's picture

Late last month, we took a look at Russia’s economy and concluded that although the country has proven to be remarkably resilient in the face of collapsing crude prices, the outlook is darkening.

The ruble has fallen for three consecutive years and is now under immense pressure both from Western economic sanctions and from crude’s inexorable decline. “The wish to hedge potential risks from geopolitics and commodities may well push the ruble to 75,” Evgeny Koshelev, an analyst at Rosbank PJSC in Moscow, told Bloomberg by e-mail in December. “It will be interesting to see if there’s a reaction from the central bank, government and households to this weakening.”

Koshelev’s warning proved prescient. Oil prices continued to slide in the new year as uncertainty out of China, a dour outlook for global growth and trade (see the IMF’s latest cut to global growth forecasts), and the prospect of increased Iranian supply weighed on a market that was already “drowning” in oversupply, to quote the IEA.

Meanwhile, the geopolitical situation took a nasty turn for the worst earlier this month when Saudi Arabia irked the Shiite world with the execution of Sheikh Nimr al-Nimr, whose death adds fuel to the sectarian fires already burning in Syria, Iraq, and Yemen. Thanks to Moscow’s intervention on behalf of Bashar al-Assad, Russia is now inextricably bound up in the melee.

Against this backdrop, the ruble has collapsed to fresh record lows and on Thursday marked its steepest two-day decline in nine months, falling beyond 85 per USD.

“After the ruble crossed the psychological level of 80, traders sharply accelerated their selling,” Alexei Egorov, an analyst at Promsvyazbank in Moscow told Bloomberg. “The ruble is catching up with oil as investors review their view on Russian assets.”

The decline has analysts pondering The Kremlin’s next move. “Any form of interventions might be the least preferred option from the CBR perspective, given their preference of having as much FX reserves as possible,” ING’s chief Russia economist Dmitry Polevoy says, in a note. “And a rate hike might be politically difficult, even though we think the CBR will have room to choose without big pressure from the government officials, if needed to do so,” he adds, noting that procyclical measures and outright FX market intervention are both on the table at this point. This week’s decline “raises [the] stakes for the CBR, if today’s signs of FX market panic passes through to retail flows from households,” he goes on to warn.

“It’s falling faster than any other currency as we see panic selling in the ruble after it breached the 80 per USD level,” Bernd Berg, an emerging-markets strategist in London at Societe Generale told Bloomberg by e-mail. “Some investors are selling at any price,” he cautions, before predicting that the RUB could fall below 100 per USD if crude continues to slide.

Russian central bank Deputy Chairman Vasily Pozdyshev isn’t concerned. “There’s no systemic risk,” he told Rossiya 24 TV on Thursday.

Maybe not, but if the RUB stays in the mid-80s, inflation will likely be running at 8% or more by year end and you're reminded that Russia's 3% budget deficit target assumes $50 per barrel crude. If prices remain below $30, the Russian economy could contract by 5% or more this year and the deficit could balloon by at least 1.4%.

For now, Russia seems to be betting that the economy (not to mention the populace) can weather the storm, given that the country continues to contribute to the global deflationary supply glut by pumping at record levels. 

Time will tell how long the Russian people are willing to stomach what's shaping up to be a nasty bout of stagflation.

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Latina Lover's picture

Ruble turns into Rubble, the ultimate fate of all fiat currencies.


Having said this,  I'll bet that the western banksters have launched a speculative attack against the Ruble, trying to instill panic in Russia.  I also bet that the Russians will let the price fall, and then redeem their Fed Reserve notes for Ruble knowing that the trend will reverse after the herd is panicked.

In the meantime, the Russian Central Bank and Government will keep on stacking.

ConfederateH's picture

Paging George Soros,  lying filthy jew, destroyer of currencies, murderer of white christians

UndergroundPost's picture

Steps to war:

1. Create a false flag event where you blame another nation/group for the incident

2. Piously, scream wildly for sanctions

3. Use all your international muscle (bribery, threats, deals, etc.) to pull the allies into the false flag induced sanctions regime

4. Crush the nation/group financially...if possible

5. If not possible to crush them financially, squeeze them forcing them to attack.

6. Again, with a very pious look, frown and "regrettably" launch a shock & awe campaign.

Mission Accomplished

Aaaarghh's picture

Dont give in Russia...dont let the fuckers win. Hopefully the Russian people will see whats going on...well, I can only hope...

Xibalba's picture

Sad.. I'm gonna go out and buy something Russian today. 

philipat's picture

It's just a final attempt by The US to fuck Russia. Expect China to reach agreement this week with the Saudis to pay for oil in CNY. And the Russian decision to price all energy exports in RUB will onlt stengthen the RUB. Russia's FinMin is a very smart lady and will sit this one out as the Western Banksters make a final futile attempt at Financial warfare. As well, of course, as the other fronts of real warfare in Ukraine and Syria.

All of the latter don't seem to be going too well??

red red wine's picture

Would Ruble return to stability if Russia declares its oil production back to the Petrodollar?

philipat's picture

You are looking backwards. In the (near) future, there isn't going to be a PetroDollar...

Money Counterfeiter's picture
Money Counterfeiter (not verified) philipat Jan 21, 2016 10:11 AM

Must be pissing off the Zionist.

1000 splendid suns's picture

Is it really crashing, how about against oil or gold? Maybe all the dollars shipped abroad through Narco/ESF are being mopped up by reverse repo.

BKbroiler's picture

what a great avatar. could zone out to that.

1000 splendid suns's picture

All currencies are going limp against the petrodolla. Wake me when the SAR/USD breaks apart. Then it's Katy bar the door.

BKbroiler's picture

It's Russia that's looking rather backwards.  They had 25 years to build anything other than a purely oil reliant economy and now it's biting them in the ass.  Oil, guns, and vodka do not an economy make.

sprintjump's picture

I'm pretty sure that they have a timber industry that is as large or larger than their energy industry. Russia is HUGE.

BKbroiler's picture

Their wood won't save them.  There was so much opportunity in that country and it was squandered. 

LawsofPhysics's picture

The russians have indeed been through hell.  Yes, in some places it is a pretty shitty and dangerous situation, BUT they are now largely self-reliant, no SNAP program for them...

They understand first hand what happens when a govenment and currency collapse.

I wonder how the useless fucking eaters in the U.S.S.A. will handle it...

If you live in the U.S. this is the only question that should concern you.

BKbroiler's picture

I wonder how the useless fucking eaters in the U.S.S.A. will handle it...

A good friend from a bad part of Baltimore once told me "the ghetto never noticed a recession".  The people who suffer will be those with large mortgages, large stock portfolios, and high standard of living costs.  Those of us who are out of debt, live modestly, and have preparations in place will be just fine.  That's why I'm rooting for the collapse.

cheech_wizard's picture

I'm rather sure that even a simple Wikipedia search on "Russian Economy" would basically point out precisely how brown your eyes are today.

Standard Disclaimer: I know even the most simplistic research is hard for the simple-minded.

BKbroiler's picture

Shut the fuck up Donny.

Let me ask you:

How many of your friends own a Russian car, TV, fridge  Phone, computer, furniture, shoes, shirt... the list could go on for days.  No one does.  They make and produce fewer quality goods than countries 1/20th their size.  This is solely due to corruption, the Russians are brilliant mathematicians, scientists, and programmers, but the smart ones leave to pursue their talents abroad because corruption is so rampant there.

malek's picture

So then China is the undisputed leading nation of the world, as how many of your friends don't own a Chinese car, TV, fridge  Phone, computer, furniture, shoes, shirt

And secondly good to know we have no problem at all with corruption at home. Especially at the highest oligarch level.

Panopticon 131's picture

Absolutely true. Russia is officially categorized as a MAFIA state with a stunning degree of systemic corruption, as Russian scholar Karen Dawisha carefully detailed in her 2014 book Putin's Kleptocracy; Who Owns Russia?  Russa's wealth disparity is greater than any other nation, by far, so much so economists believe it should be in its own category.  The median Russian ANNUAL income in 2014 was ~$871 - under a thousand dollars.

Russian elites invest the billions they've looted from their own countrymen in western investments and offshore accounts under shell companies, and a significant percentage park their families in the safer west while they continue to loot Russia.  There are no good oligarchs / kleptocrats / plutocrats in the world and that includes China.  

besnook's picture

when you don't need the dollar a dollar valuation for your currency means nothing. i wonder what the unofficial, only they know, rub/cny value is. the dollar based valuations just aren't as important as when the dollar ruled the world.

VAD's picture

They do export quite a bit of ammo.....

2ndamendment's picture

Support your local Russian.... buy moar Vodka. 

fx's picture

"Time will tell how long the Russian people are willing to stomach what's shaping up to be a nasty bout of stagflation." WTF?  I never knew that anyone of us mortals of the 99.9 % had the privilege to accept or decline stomaching stagflation, inflation, deflation! But maybe I have viewed life and the world just from a totally wrong perspective...

12357111317's picture

If you are a member of the 99.9% then OF COURSE you have viewed life and the world just from a totally wrong perspective.    :-)

__Usury__'s picture
__Usury__ (not verified) UndergroundPost Jan 21, 2016 8:36 AM



'Balfour: We are probably fools not to find a reason for declaring war on Germany before she builds too many ships and takes away our trade.

White: If you wish to compete with German trade, work harder.

Balfour: That would mean lowering our standard of living. Perhaps it would be simpler for us to have a war... Is it a question of right or wrong? Maybe it is just a question of keeping our supremacy.1'

blabam's picture

George Soros invented fracking? 

Rubicon's picture

How many Ruble to an ounce of gold now?

philipat's picture

Which, of course, explains why the Russian Treasury has been dumping UST's and buying Gold....

UndergroundPost's picture

Why is Soros face so damn fat?

RadioFlyer's picture
RadioFlyer (not verified) UndergroundPost Jan 21, 2016 8:26 AM

Stem cell injections.  Haven't you noticed that none of these elite are dying off?

iClaudius's picture

"Why is Soros face so damn fat?"
To make it easier to hit.

Ghost of Porky's picture

From eating so many human fetuses wrapped in gold foil.

Mr Pink's picture

True....babies can be very fattening

cheech_wizard's picture

Although I sincerely doubt this 

>"pressure from Western economic sanctions"

is causing the problem. The Russians are far more resilient than Western media makes them out to be.

Standard Disclaimer: Agree with the point the Western bankers are causing all the mischief. Personally speaking, one has to love Russia's flat tax, and admire their administration for keeping their debt to GDP ratio as low as it is.

GRDguy's picture


 "Investors" == banksters; "selling rubles" == economic warfare.

Same circus, different clowns.

BlindMonkey's picture

My family there are saying "what sanctions?"  


Inflation is hitting them though.  8% is a bitch of an inflation load.

junction's picture

Obama and his coterie of NWO murderers, thieves and pedophiles are depending on Wall Street fraudsters to whack the Russian economy.  This continuing plunge in the ruble's value will slam the high end real estate market in New York City and Miami, where Russian oligarchs have parked much of their ill-gotten gains from looting formerly Russian state owned enterprises.  The recent announcement from Obama's flunkies that they are looking into the use of high end real real estate in Manhattan and elsewhere as a dirty money laundromat was aimed at Russian real estate buyers.  Can you spell "asset furfeiture?"  The Russian war against Obama's jihadist murderers in Syria will continue, whatever Obama's crime cartel does.  

aurum4040's picture

When did Lindsay Graham, McCain and the rest of the neocons  really push for war in Syria? August /September 2014 which coincides with the beginning of the collapse in crude, the ruble, the Russian markets. Its economic warfare. The Russians have shown there resilience and then some. All its going to do is push them and the rest of the world away from the USD at a heightened pace. 

Winston Churchill's picture

Of course its economic warfare, and the few(nowadays) Russians I still speak to tell me

the general populace is well aware of it.Also that it ends in real war, which no sane person wants,

but looks inevitable now. Tick tock.

Grimaldus's picture

"When did Lindsay Graham, McCain and the rest of the neocons  really push for war in Syria?"


When the progressive criminals in charge told them they could. Super progressive hero Hillary "Bloody Hands" Clinton lead the charge in Libya and Syria. Graham, McCain and the rest of the neocons are actually progressives themselves and are about as far from true constitutional conservative as it is possible to get.

Wait, you actually thought progressive obamatron assclowns in charge meant that prancing unicorns singing kumbaya and shitting free skittles  tra laladeda everywhere didn't you?

Have you finally realized that progressives are the face of death for millions and your angry with yourself for being such a useful idiot but don't have stones enuf to admit your progressive taint, lashing out at "neocons" who are actually tainted progressive like you?

Open your eyes to the world of blood that is the progressive world.

Progressives murder defenseless babies by the millions just to warm up and are chomping at the bit to euthanize old people. Progressives mandate increasing crush death on highways with fuel efficiency laws. Progressives killed and continue to slaughter untold millions with a miserable death by malaria by banning DDT. Bill Ayers, Obirdbrain's mentor still wants 25 million law abiding American citizens dead so he can have his progressive utopia.

Progressives are in charge dude and the neocons are just their useful idiot lappdogs. Crime pays. And to have a crime, you must first have progressives.






aurum4040's picture

Lol, dude progressive schmagressive, your comments were very far from my point - the most recent 'war' on Russia has been going on for some time and its only going to exacerbate the worlds USD issues 

Grimaldus's picture

Hey man had to make sure proper credit is given to the ones deserving of it and blaming neocons does not get the job done, ok?

I understood the old apprehension about Russia from the Stalin days when he was murdering 60 million Russians but things have really changed since then. Even still the point could be made that Russians murdering millions of their own is their business alone and should have never been an issue for us. Whatever. Now we should be doing brisk biz with the Russians. I would love to be sampling inexpensive Russian potato vodkas. I am with you, the "war" on Russia is another example of progressive incompetence and criminality.

Progressives are driven to turn everything they touch to shit.









Panafrican Funktron Robot's picture

I'm looking at their debt to GDP ratio and realizing why their central bank views this as a nothingburger.  Also, their continued and rapid de-dollarization will drive the information regarding "ruble priced in USD terms" towards irrelevancy.  

philipat's picture

Yes, Russia has a debt/GDP of about 17%, is largely self-sufficient and, as Napoleon and Hiltler discovered, a highly resileint population, especially in the face of outside agression. Putin's popularity rating remains above 90% (Versus Congress at 7%).

So, it seems to me that Russia might, actually, be able to see this through.....?

TheReplacement's picture

Funny thing.  I heard Russians call it "rubble" when there.  I asked.  They said it can be pronounced either way.

post turtle saver's picture

oh look, Putin and the Russophiles got their shit pushed in up to their tonsils, which has the ZH Pooty Poot echo chamber up in a roar...

it's not like this wasn't predicted, folks... quit acting surprised and get used to it, you're not going to see $50+ per barrel to prop up Fearless Leader until around 2050... so sayeth the Saudis...