Category: Economics

What, how and why of the Russian rouble fall December 2014?

  • What: 9% fall of Russian currency (Rouble) against US$ on 01 December 2014, biggest one day decline since 1998.
  • How: Foreigners sell Rouble holdings + Rouble denominated assets. Domestics seek safe haven in US$ by selling Roubles.
  • Why: Recent falls in oil prices escalate fears re health of Russian economy, already fragile by West's sanctions imposed in retaliation for Crimea annexation & support for separatists in E-Ukraine.

What is the Gulf Cooperation Council (GCC)?

  • Regional intergovernmental political and economic union established in 1981.
  • Comprises all Arab states in the Persian Gulf (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirate), except for Iraq.
  • Objectives include economic co-operation (gov't & private level), formulating regional regulations (trade, finance, tourism, customs) and military co-operation.

What is OPEC?

  • International organisation whose mission is to coordinate the policies of the oil-producing countries.
  • Since it's inception in 1960, OPEC was able to influence the oil price by acting as an economic cartel - but from Nov. 2014, Saudi Arabia (OPEC's de facto leader) started treating the organisation as increasingly irrelevant.
  • Member countries are Iraq, Kuwait, Iran, Saudi Arabia, Venezuela, Libya, UAE, Qatar, Indonesia, Algeria, Nigeria, Ecuador, Angola, & Gabon (note that Russia & Norway are not members)..
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