Looks like as rouble devaluation might be coming.
Russia\’s central bank has raised interest rates a full percentage point to 12pc to prevent a collapse of the rouble following a day of mayhem on the Moscow markets, prompting concerns that the financial crisis may be spiralling out of control.
When the rouble was soaring as a petro-currency my suppliers insisted that this meant I had to pay a higher price in $ to help cover their costs. Fair enough actually. It\’s just that if there is a devaluation, I don\’t see them offering to lower their prices.
Funny that, ain\’t it?
Yup, that Russian naval base in Iceland is looking increasingly unlikely … the one over by the freezer section.
A similar thing happens to us in the biofuels business. When prices were rising fast we honoured our contracts at the lower rate which was agreed a month earlier. Now the market has collapsed buyers are reneging on contracts made a month ago when the price was higher.