020 7898 0500- Overnight the Russians increased their interest rates by 6.5% in an effort to protect the rouble. Is this likely to be effective, probably not because most commentators would view its interest rate of 17% as unsustainable and also this huge increase as a sign of panic within the Russian Central Bank. The oil price is also in freefall and in December we have seen the rouble lose 20% against sterling. More losses seem likely and we could well see another debt default from Russia.
- The Norwegian krone continues to suffer from the interest cut last week. With oil prices continuing to fall, this has become a major concern for the Norwegian government. In the short term, positive unemployment data out on Friday would boost the currency; however, it is forecast to rise from 2.6% to 2.7%, a worrying sign for the economy so dependent on oil.
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