1 Rouble collapse shakes Russia (San Francisco Chronicle) Russian President Vladimir Putin faces a major new challenge after a catastrophic fall in the value of the ruble, which hit a new low Tuesday despite the Central Bank’s desperate efforts to halt the selling. On the streets of Moscow, panicky consumers rushed out to buy home appliances before they became even more expensive.
Putin’s popularity has been based on oil-driven economic growth that has helped increase incomes during his 15-year rule. The ruble’s collapse, driven by a combination of slumping oil prices and Western sanctions, is denting that pillar of his power.
The ruble hit a record low of 80 to the dollar — down a catastrophic 24 percent — before making a modest improvement to trade at 72 to the dollar by late Tuesday afternoon. The market plunge defied a whopping pre-dawn interest rate hike of 6.5 percentage points by Russia’s Central Bank aimed at defending the currency.
Along with Western sanctions, the ruble’s depreciation has been driven by a slump in the price of oil to below $56 a barrel from a summer high of $107. The bulk of the government’s revenues come from oil.
Tuesday’s Central Bank rate hike was intended to encourage currency traders to hold onto their rubles. But analysts said the measure was already insufficient because banks and companies could earn much bigger yields by buying hard currency. Meanwhile, higher rates could hurt the economy. Analysts said that if the panic ruble-selling continues, the Russian authorities could be forced to impose capital controls. That would be bad news for any foreign investors who still haven’t pulled their money out of Russia.
2 Oil, rouble to roil world markets (Straits Times) World markets braced for more volatility as tumbling oil prices and a brewing financial crisis in Russia sent investors stampeding for safe havens such as the yen and US Treasuries.
The jump in the yen is likely to pressure Japan’s Nikkei, while fears of capital flight will haunt emerging markets across Asia. MSCI’s index of Asia-Pacific shares outside Japan is already at nine-month lows.
In currency markets, the Russian rouble crashed back to earth after an emergency hike in interest rates provided only fleeting support. It was quoted around 68.00 to the US dollar having been as far as 80.00 at one stage. Three retail trading platforms halted trading in the currency as speculation mounted that Moscow will impose capital controls within the next few days.
3 For India, ‘rape still biggest shame’ (BBC) Two years after the horrific gang rape and murder of a student in Delhi, sexual assaults against women continue to be India’s biggest shame, papers say. The gang rape of the 23-year-old medical student on a moving bus on 16 December 2012 had triggered intense protests across the country which led to the formation of stringent anti-rape laws.
The father of the victim, however, laments that “nothing” has changed since the brutal attack on his daughter two years ago, The Times of India reports. “Nothing in India has changed… All promises and statements made by our leaders and ministers have turned out to be shallow,” the paper quotes him as saying, in reference to a recent rape case in the capital.
A driver of international taxi service Uber allegedly raped a 26-year-old woman in Delhi on 5 December. More cases of rape have been reported throughout the year from different parts of the country. Lawyer and rights activist Vrinda Grover says that the fast-track courts set up to expedite trials in cases of sexual assault have also been ineffective.
Papers also say that the mind-set of the “patriarchal” political class in the country remains incompatible with women’s rights. The DNA newspaper points out that the report of the Verma Commission, set up after 16 December 2012 to revisit laws on crimes against women, put the blame squarely on “the government, the police and even the public, for its indifference to issues related to gender”.