The ruble lost 2.5 percent to 66.0985 against the dollar as of 12:53 p.m., reversing an early gain prompted by the news.
The announcement, as well as its timing, underscored the financial straits in which Russia now finds itself. If sustained, the new higher rates would squeeze an economy that is already being hurt by sanctions led by the U.S. and European Union, and by a collapse in oil prices. Some analysts said they doubted the economy could withstand such high rates for long.One of the methods Reagan used to destroy the Soviet Union was to collude with Opec into dropping the oil prices. Anyone remember this from the 1980s?
It wasn't just because the market was dropping. It was Reagan's energy policy which was as much foreign policy as economic policy. Low oil prices hurt Russia as well as terrorists countries. The difference today is it isn't a government edict... it's the market. US supplies are driving the price down. This is good for weakening these countries that are bent on being our enemy. Can't bankroll terrorism if there's no money. Can't invade countries if you can't afford your army.
Combine this with yesterday's news that electric cars are bad for the environment? Cheap oil may be a moral imperative.