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Thursday, 25 December 2014

​Ruble’s ‘perfect storm’ over – finance minister — RT Business

​Ruble’s ‘perfect storm’ over – finance minister — RT Business:



"The weak period of the ruble is over; there is now a strengthening trend in the national currency Russian Finance Minister Anton Siluanov said.



"The ruble has found a balance and begins to strengthen," Siluanov said at a Federation Council meeting Thursday.



The ruble strengthened in Thursday trading, reaching 52 against the dollar, the highest since December 2. The euro exchange rate improved by 1.77 rubles compared to the previous close, at 63.75 rubles."



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Saudi projects huge deficit as oil price drop bites - Business Insider

Saudi projects huge deficit as oil price drop bites - Business Insider:



"Saudi Arabia announced a 2015 budget with a huge deficit Thursday as the world's largest crude exporter begins to feel the impact of its own decision not to shore up oil prices.



The government announced the $38.6 billion deficit in a statement read on state-run television, adding that it would nonetheless boost projected spending by tapping its vast financial reserves.



The lead producer in the Organization of the Petroleum Exporting Countries, Saudi Arabia has insisted the cartel will not move to strengthen global oil prices despite a drop of nearly 50 percent since June."



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MIDEAST STOCKS-Markets rise as Saudis maintain spending in 2015 budget | News by Country | Reuters

MIDEAST STOCKS-Markets rise as Saudis maintain spending in 2015 budget | News by Country | Reuters:



"Gulf stock markets rose on Thursday as Saudi Arabia released a 2015 state budget that will keep spending high, reassuring the region that economic growth is unlikely to be hurt much by the plunge of oil prices.



The Saudi budget envisions state spending at a record 860 billion riyals ($230 billion) next year, up 0.6 percent from the 2014 budget plan.



That would be the smallest rise in over a decade, but much better than the possible spending cuts that the markets were worrying about early this month. A 145 billion riyal budget deficit would be covered by the government's huge reserves."



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MIDEAST STOCKS-Gulf markets may lose steam on retreating oil price | Reuters

MIDEAST STOCKS-Gulf markets may lose steam on retreating oil price | Reuters:



"Gulf stock markets may lose steam on Thursday after global oil prices pulled back overnight, with Brent crude again testing the psychologically important $60 a barrel level.



Bourses rose strongly on Wednesday on anticipation that the Saudi Arabian 2015 state budget, expected to be announced on Thursday, possibly during Saudi market trading hours, would keep spending high.



The country's Al-Madina newspaper, quoting unnamed sources, reported earlier this week that the budget would actually contain a marginal rise in spending, with the government using its huge fiscal reserves to cover a deficit."



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Year in review 2014: Opec’s oil-price strategy anyone’s guess | The National

Year in review 2014: Opec’s oil-price strategy anyone’s guess | The National:



"The headlines at the end of November, following the meeting in Vienna of Opec’s oil ministers, were to varying degrees quite hysterical. There were declarations that it was “the end of Opec’s power” and much talk of crisis and disarray in the previously all-powerful oil cartel, which once held the world to ransom over the price of a barrel of oil. Also, there was triumphalism about the coming of energy independence for the United States based on shale oil and gas. The abundant new supplies in North America have become available because of new technology that enables companies to get the stuff out of previously impossible-to-reach rock formations.



There were myriad dissections and analysis about what Saudi Arabia, Opec’s de facto leader, was up to with its strategy to keep pumping oil at the same rates even though production is – and will continue to be into next year – at least a million barrels a day more than the world demands. Was it aiming to defend market share and to let prices slide even lower to force off the market some of those more expensive-to-produce supplies, especially US shale oil? Did Riyadh have some foreign policy aims in mind with its low-oil-price strategy, such as keeping pressure on Iran and, in support of its US ally, on Russia, both of which have been suffering from sanctions?



It is at times like this that some historical perspective is needed. Oil prices have indeed seen one of their most precipitous declines since last summer, when the price of world benchmark North Sea Brent crude was above US$115 (Dh422) a barrel. By early December, the decline was about 40 per cent, with Brent trading either side of $70."



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No cause of concern in the UAE | GulfNews.com

No cause of concern in the UAE | GulfNews.com:



"The UAE At this point, resilient to the drop in oil prices, given a relatively diversified economy, excellent infrastructure, a more transparent and better regulated banking system, political stability, and ample foreign assets, said Garbis Iradian, Deputy Director of IIF.



The IIF expects monetary and fiscal policies to remain broadly accommodative. The consolidated fiscal balance is projected to remain in small surplus through 2016 given the UAE’s relatively low fiscal break even price of $74/bbl and external current account break even price of about $60/bbl in 2014.



The recent sharp increase in the power and water tariffs are expected to lower current public spending, while the real non-hydrocarbon GDP growth would remain strong at 4.8 per cent in 2015. The relatively low fiscal and external current account break-even prices of oil and ample foreign assets will enable the UAE to maintain its high level of spending on infrastructure and major projects and this will support growth in credit by banks. About $700 billion worth of infrastructure projects are expected to be implemented over the next 15 years."



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GCC growth to continue despite oil decline and market volatility | GulfNews.com

GCC growth to continue despite oil decline and market volatility | GulfNews.com:



"The recent sharp fall in oil prices and significant volatility in capital markets are not likely to impact the economic growth prospects of Gulf Cooperation Council (GCC) countries according to the Institute of International Finance (IIF), a Washington based global association or trade group of financial institutions.



While large foreign exchange assets underpin the dollar peg regime in the GCC, the region has been subject to volatility in asset prices, with the MSCI GCC index still down more than 20 per cent from its peak despite paring back some losses.



“The GCC countries are much better positioned to cope with a slump in oil prices today than they were in the 1980s and 1990s. Ample public foreign assets and low debt in most of these countries will mitigate the adverse impact of low oil prices on economic activity and allow continued robust public spending, particularly on infrastructure,” said Garbis Iradian, Deputy Director of IIF."



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S&P’s Russia Junk Warning Shows Ruble Rebound Comes Late - Bloomberg

S&P’s Russia Junk Warning Shows Ruble Rebound Comes Late - Bloomberg:



"For all of the progress Russia has made over the past week in stabilizing the ruble and quelling its financial crisis, Standard & Poor’s delivered a reminder of just how precarious the situation remains.



S&P said it’s considering cutting Russia’s credit-rating to junk, or below investment grade, for the first time in a decade as the looming recession spurs concern that the nation’s banks will face mounting bad loans. Hours before S&P released its statement yesterday, lawmakers sought to address that very concern, pushing through legislation that will allow President Vladimir Putin’s government to bail out struggling lenders.



While the move was anticipated -- bond investors have been trading the country’s debt as if it were junk-rated for weeks -- the timing was odd. Policy makers have orchestrated a 47 percent rebound in the ruble since it plunged to a record-low 80.10 a dollar Dec. 16 by pushing exporters to bring money back into the country and by creating a credit crunch that cut off some investors from the local currency needed to buy dollars."



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