The meltdown of Russia’s currency, brought on by falling oil prices, collapsing confidence in the central government, and international financial sanctions, is now manifesting itself as a panic. It’s “the most incredible currency collapse I think I have ever seen in the 17 years in the market, and 26 years covering Russia,” wrote Timothy Ash, Standard Bank’s head of emerging market research, in a note this morning. “No one expected the ruble to hit 60 this year against the dollar, let alone 70 or 80 even. And no one is positioned for this. This will impart huge short term damage to Russia.”
And the reverberations will be felt beyond the country’s borders, globally, but most acutely by its neighbors, where the oil-fueled Russian boom of the last decade has rained cash upon exporters and economic migrants alike.
Consider Tajikistan. Remittances — cash sent home from citizens working abroad — make up 42% of the Central Asian republic’s GDP, according to World Bank data, with almost 60% of those remittances coming from Russia. In the course of just a few months, the value of those remittances has been chopped in half. The results will be devastating.
Russia’s Meltdown Will Shake The World, From Tajikistan To Tokyo – BuzzFeed News.