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Russian Ruble and Turkish Lira in Free Fall - € Rising

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  • #16
    Rouble is strengthening, oil is rising.

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    • #17
      Originally posted by Jonathan View Post
      Please stop posting. This is painful. You have no idea what you’re even trying to say.
      Leave him John. Probably some poor blue collar guy who doesn't understand what Central Bank Rate is.

      Comment


      • #18
        Originally posted by picanha View Post
        You even less than me it seems. Tell me why is the capital fleeing the RF market? To a point were it is more attractrive to invest in 0% interest rates than in 7,25
        Because this is the money you have to return to the bank when you take loan, not the money the bank gives you when you place your deposit. The less, the better.
        Totally and utterly opposite of what you think.

        The rest is the same quality nonsense.

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        • #19
          And where gets CBR its money from? Especially foreign valuta? They print it themselves?

          Bwah they even pay 12,75 % on federal bonds you experts - now make the calculation..


          Despite having high interest rates in contrast to meqare € the money flows away that was my point....

          Comment


          • #20
            Central Bank and Ministry of Finance are two completely diffent institutions. Central Bank rates have nothing to do with government bond rates. You just mixed everything together. Complete disaster..

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            • #21
              Originally posted by picanha View Post
              And where gets CBR its money from? Especially foreign valuta? They print it themselves?
              Export surplus.

              Speaking of which.
              Russian federal budget runs $5.5 bln. surplus in March. Looks like we can expect a bridges to Sakhalin and Hokkaido or NordStream-3.

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              • #22
                Ok in RFs case due to high oil and gas sales this might be enough.


                Anyway a performing healthy growing economy should attract foreign investment and not divestment.

                Especially when combined with high interest rates.

                Here I see the political ego being counterproductive.

                In an essence (I am no economist - just for the records):


                A. High interest paying environment - should be more attractive but is less attractive for investors (RF)

                B. Low interest paying one - should be less attractive but is more attractive to investors than RF (EU)


                Reasons are also the mentioned instability of the Ruble.

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                • #23
                  Originally posted by picanha View Post
                  I am no economist
                  Yes, and it only takes 4 words to sum up everything you wrote in this thread.

                  Comment


                  • #24
                    Can you disprove what I wrote above? Or only one liners?

                    Comment


                    • #25
                      Originally posted by picanha View Post

                      A. High interest paying environment - should be more attractive but is less attractive for investors (RF)

                      B. Low interest paying one - should be less attractive but is more attractive to investors than RF (EU)



                      Reasons are also the mentioned instability of the Ruble.
                      I tell you yet another time, Central Bank interest rates are the limits for the loans. They are high to counter inflation.

                      Ruble had double digit inflation just 10 years ago and triple digits during Boris the Bottle rule (up to 400%) which were eating single digits interests. The Rouble's interest rates are higher than inflation, and therefore somehow profitable for deposits (what you fixated on), only for 2 years now. It has to grow reputation yet.

                      The comment on the Rouble stability and why it was evaluated 2 fold as well as what effect it brought to countering low oil prices and Russian exports of non hydrocarbon goods, especially agroindustry, is too long and politically charged for me bothering.

                      Meanwhile, while we speak, both the Dollar and Euro continue "free fall", as you call it, against Rouble for the third day, and will stop in the corridor of 55-60 per dollar in a week, given there is "moar sanctions" incoming.

                      Like it or not, but the economy isn't you strong part. You didn't even bothered to look up vital macroeconomic inputs and continue sticking with preferable an totally wrong interpretation of "interest rates". How about checking up correlation with inflation history for a starter? And some basic macroeconomy lesson (Inflation - Interest Rate relationship on Investopedia)?

                      Comment


                      • #26
                        Don't know in which alternate reality you live. But judging on your $ / € free fall comment...

                        https://www.xe.com/de/currencycharts...to=RUB&view=1Y


                        You may be surprised but I know all that. It can't be extrapolated though and made into an universally applicable rule.


                        Inflation is too low in RF so the CBR reduces the interest rates more and more.

                        And yes my point stands that something is wrong with high interest and low investment. In teh EU investors had probeklms due to low to non existing interest.

                        So somebody offering between 8 to 12 % and NOT attracting capital has a problem.



                        And anybody calling the Ruble stable..

                        Comment


                        • #27
                          Originally posted by picanha View Post
                          Inflation is too low in RF so the CBR reduces the interest rates more and more.
                          Of course it is. Everyone waiting cheap loans in Russia. Savings is not a thing. Back in the days it used to be cheap loans in Eurozone,but since the West act as psychopaths lately, you have to be very stupid to entrust your money to European banks.

                          Expecting foreign savings when Rouble is profitable for only 2 years in entire history while US threatening everyone and his mom with "serious consequences" for trading with Russia is little bit off.

                          But whatever floats your boat. You're not the first who expecting Russian collapse "anytime soo" for 20 years straight. Maybe one day your dream will come true, but not today, and not tomorrow either.

                          Comment


                          • #28
                            Originally posted by picanha View Post
                            Don't know in which alternate reality you live. But judging on your $ / € free fall comment...

                            https://www.xe.com/de/currencycharts...to=RUB&view=1Y


                            You may be surprised but I know all that. It can't be extrapolated though and made into an universally applicable rule.


                            Inflation is too low in RF so the CBR reduces the interest rates more and more.

                            And yes my point stands that something is wrong with high interest and low investment. In teh EU investors had probeklms due to low to non existing interest.

                            So somebody offering between 8 to 12 % and NOT attracting capital has a problem.



                            And anybody calling the Ruble stable..
                            You are clueless.

                            You are conflating terms you don’t understand the meaning of. First see Akril’s post. Next learn the difference between foreign direct investment and foreign portfolio investment.

                            Better yet stop posting and embarrassing yourself by saying random things using terms you don’t understand.

                            Comment


                            • #29
                              Originally posted by picanha View Post
                              Ok in RFs case due to high oil and gas sales this might be enough.


                              Anyway a performing healthy growing economy should attract foreign investment and not divestment.

                              Especially when combined with high interest rates.

                              Here I see the political ego being counterproductive.

                              In an essence (I am no economist - just for the records):


                              A. High interest paying environment - should be more attractive but is less attractive for investors (RF)

                              B. Low interest paying one - should be less attractive but is more attractive to investors than RF (EU)


                              Reasons are also the mentioned instability of the Ruble.
                              Profit = Revenues - Costs

                              This is basic economic equation.

                              Higher interest rates make credits more expensive which reduces consumer purchasing power and increase producer costs minimizing profits. That's why investors prefer jurisdiction with lower interest rates.

                              How does it feel being terminated, picanha? Good?

                              Comment


                              • #30
                                Originally posted by picanha View Post
                                The much maligned € gains traction.
                                It is not simple. The weakness of the Euro is one of the reasons why the German export industry is doing so well.

                                A “German euro” was nearly 17 percent undervalued against the dollar in PPP terms, while a “French euro” was overvalued by nearly 5 percent. A “Greek euro” was overvalued by 7 percent.

                                “German exporters remain the beneficiaries of a system that is causing stagnation and unemployment in the rest of Europe,” World Economics said in the report.
                                https://www.reuters.com/article/uk-u...-idUSKBN15I1ND

                                Weaker currencies means also more competitive domestic producers on the domestic market...

                                Autostat – According to Autostat data, the share of locally assembled vehicles in Russia has reached 82.2% within the first 8 months of 2017. This is the highest level in the history of the Russian automobile market.

                                ...

                                At the same time, the ruble, which lost value against all key world currencies, has made the direct imports of cars less profitable.
                                http://rusautonews.com/2017/09/28/ne...s-risen-to-82/

                                ...and makes your more attractive to tourists.

                                When you look at the impact that Brexit has had on the UK, one aspect that can be genuinely quantified is the manner in which the loss in value of the pound has seen the UK tourist industry boom.

                                Visitors have been able to see their hard-earned cash go far further than it previously would, and has even seen hotels previously deemed too expensive for the Average Joe to stay in become more affordable. UK residents have also, in some cases, opted to book staycations as their money can't go as far anymore.

                                ...

                                Indeed, the most recent evidence seems to suggest that the great exodus of tourists seems to finally be over and that the numbers are back on the rise, with headline figures showing that tourist numbers are up 18% compared to 2015. This sector isn't the only one that is important for the Turkish economy, but this return to better times suggests that the country could well be benefiting from the pressures that the Lira is under.
                                https://ftnnews.com/news-from-turkey...to-turkey.html

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