By Edward Hadas
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
The Central Bank of Russia was successful for about two hours. Its overnight decision to hike the main interest rate from 10.5 percent to 17 percent initially shocked markets enough to arrest the rouble’s fall after the currency sank almost 12 percent on Dec. 15. But the Russian currency quickly resumed its slide, smashing record lows – as if the central bank hadn’t moved at all. That leaves policymakers with few sensible short-term options. Further out, only an end to the Ukrainian stand-off and related Western sanctions or sharply higher oil prices could soothe markets. Neither is likely to happen soon.
By Rob Cox
The author is a Reuters Breakingviews columnist.
Janet Yellen faces a long list of challenges for 2015. The Federal Reserve chair must keep her fellow governors aligned on the timing of interest rate increases while battling a Congress hell-bent on circumscribing the U.S. central bank’s powers. A less obvious trouble spot for Yellen’s year two in the job may be restive shareholders of systemically important financial institutions.
Since OPEC decided not to cut production at its meeting last week the tumble in the oil price has generally been considered a good thing for the consumer. What no-one has concentrated on is the fact that declining oil wealth, particularly in the cash-rich Middle East, could make banks in the UK more vulnerable should we get hit with another financial crisis.