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Published in Stream:
Russia Update: January 21, 2016
Press by
The Interpreter
Russian-to-English translation journal, with original analysis and commentary on Russia's foreign & domestic policy.
Ruble Sinks to New Low of 85 to US Dollar; VTB President Says 'Will Never Return to 60 Again'
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The rate of the ruble to the US dollar fell to yet another historic low today as it is trading at 85 to a dollar, 91 to a euro, reported; the lowest before the current period was on December 16, 2014, so this means this the worst exchange rate since since the crisis of 1998. Currently the ruble is trading at 84.30 to the dollar and 91.86 to the euro, with Brent crude at $27.68, reported.

The Central Bank raised the official rate by over 4 rubles to 83.59 for the dollar and 91.18 for the euro, Vedomosti reported.

Vedomosti reported that Andrei Kostin, president of VTB Bank, who was attending the Davos World Economic Forum this week, commented that the ruble was weak "against the strongly rallying dollar."  

Translation: Kostin: The dollar at 60 rubles is hardly likely.

He further noted (translation by The Interpreter):

"I don't expect a significant rallying of the ruble, although with the drop in oil prices some correlative rise is possible.

But it will never return to the level of 60 rubles (to the dollar)."

He didn't see signs of a currency shock despite the 4% drop today.

"There is no currency shock, we don't see behavior by clients  out of the ordinary, he told journalists. In his opinion, the current level of the key rate of 11% is adquate for the economic conditions.

"It's possible that that there will be a weakening of the Central Bank from the perspective of the normatives, I don't think that the support of capital and liquidity is needed, said Kudrin, answering a question regarding whether the support of the banking sector was needed.

Presidential administration spokesman Dmitry Peskov said:

"I wouldn't use the word 'collapse.' The rate is really changing, the rate is volatile, but that is far from a collapse."

He said the Central Bank has developed several scenarios which will help to avoid a real collapse.

Sixty percent of Russians polled by Nielsen said they were refraining from buying new clothes due to the economic crisis, reported.  And 71% said they were making compromises of some kind in their budget, whether deciding not to travel or to buy less food

Russian social media has been full of commentary on the ruble crash, a lot of it sardonic.

Translation: I saw the rate of foreign currency.

This Coub (a Russian version of a Gif) is popular; it shows a cartoon cat smashing a puzzle of a fish.

Translation: The Ministry of Finance is saving Russia's economy.

Cat:   "Once again, nothing works! And that's how it works, too... Well, please, I don't need it!."

In this Coub, a clip from the movie Liar, Liar starring American actor Jim Carey showing incredulity is mashed up with an interview with Patriarch Kirill, who solemnly proclaims, "We are not talking about the value of the ruble; we are talking about a change in the exchange rate of the ruble." reported that lines were forming at a number of currency exchange booths in Moscow, and some experts were starting to use the word "panic."

 "The panic factor is clearly operating," said Ilya Prilepsky, head of International Economy at the Economic Expert Group.

-- Catherine A. Fitzpatrick