By Ani Nrusimha
The country ruled by a president famed for riding bears has entered into a severe bear market. An economic calamity is looming over Russia, and the potential for economic downturn is terrifying. Russia is the world’s sixth largest economy, and due to a rapidly inflating currency and dropping prices in oil, its economy is hurting.
One of the many reasons that the Russian economy is tanking is due to a rapid decline in oil prices; for the first time in over half a decade, the price of oil has dropped below $60 for a barrel of crude. There a multiple reasons for this, the most notable being a recent decision by Saudi Arabia to not curb oil production – effectively increasing the supply of cheap oil. Saudi Arabia has a large supply of cheap oil, and had often agreed with other OPEC members to curb production in order to keep oil prices high. The decision to vastly increase production has hurt many other oil producers, especially Russia, because cheaper oil decreases the profit they get from their exports. Russia is a major energy exporter to many european countries, and the recent decision has severely hurt the ruble.
The Ruble has plummeted even faster than the price of oil, however. Due to economic sanctions against Russia due to their annexation of Crimea, there has been a lot of difficulty in lending money. A large shot to Oil prices sent the Ruble tumbling to a record of 80.1 rubles to the dollar. In fact, the situation got so bad that Vladimir Putin put a cap on Vodka prices. The value of the currency has started to stabilize due to large economic action by the government.
According to Russian Finance Minister Anton Siluanov, “We think that now this period has come to an end, the period of economic instability. We think that the Ruble is still undervalued at the current price of oil.” One notable action taken by the government was to order companies to sell foreign currencies, and an increase in the interest rate by the central bank. Both of these decisions have caused some grumbling from businesses in Russia. However, the country is not out of the clear just yet. Standard & Poor’s, a credit rating agency, has warned that they might downgrade the credit rating of Russia, which could severely hurt their economic potential. Currently, the crisis is averted, but we may be in the eye of the storm.
Kim Jung Un, the North Korean leader, has recently emerged to the public after a disappearance from public view for about six weeks. The National Intelligence Service of South Korea explained to lawmakers that a cyst was found on Kim’s ankle and prompted ankle surgery during the months of September and October, which coincide with the months of his absence. . North Korea has also executed ten party officials by firing squad for various accusations ranging from corruption to the viewing of a South Korean soap opera. Senior military officials have also been demoted due to poor accuracy in artillery drills.
Kim’s disappearance caused him to miss the 65th anniversary of the Worker’s Party of North Korea, which sparked speculation and controversy surrounding his disappearance.
