What transpired in Russia that led Jordan Weissmann to pen a piece for Slate titled "Russia Is So Screwed"? The country's Central Bank made a surprise decision in a 1am meeting to jack its interest rate from 10.5% to 17% in a last-gasp attempt to stanch the fall of the ruble, which has been hammered this year by sinking oil prices and the impact of the West's sanctions. It didn't work, writes Matt O'Brien at the Washington Post's Wonkblog. The ruble plummeted 11% against the dollar today, its steepest intraday fall in 16 years. Pundits are weighing in on what this means for Russia and Putin, and using "doom" and its synonyms.
- As O'Brien sees it, "It's a classic kind of emerging markets crisis. It's only a small simplification ... to say that Russia doesn't so much have an economy as it has an oil exporting business that subsidizes everything else." Our own oil supply is up, while demand from elsewhere is down. And even that wild interest rate isn't enough to make Russians warm to the ruble. "In other words, there's a well-justified panic. So now Russia is left with the double whammy of a collapsing currency and exorbitant interest rates. Checkmate."