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These are stories Report on Business followed this week.

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Crisis? What crisis?
To Vladimir Putin, these are "trying" times.

Which is an interesting way of quantifying the collapse of your currency to a record low, the promise of a recession, an exodus of funds and the frantic search of your citizens for somewhere – anywhere – else to put their money.

"We are going through a trying period, difficult times at the moment," the Russian president told his annual news conference this week.

"I would not call the situation a crisis. You may call it whatever you want."

Here's how "trying" the week was: The destruction of the ruble forced the Central Bank of Russia into an emergency, middle-of-the-night rate hike to defend the currency and stem a capital outflow.

And not just an average hike, but rather one that took the policy rate to an elevated 17 per cent from 10.5 per cent.

Coupled with that was intervention in currency markets.

At the same time, Apple Inc. halted online sales in Russia, the European unit of General Motors Co. suspended shipments of vehicles to Russian dealers, currency trading platforms stopped dealing in rubles, and some companies reportedly hiked their prices.

And then there was Ikea, which also reportedly stopped sales of appliances for a couple of days, but for a different reason, one that underscores the "trying" nature of the times.

As The Globe and Mail's Brian Milner reports, Russians are frantically trying to buy big-ticket items – like real estate, cars and Ikea kitchen appliances because they promise to hold more value than their currency.

"Since November 2014, domestic consumers have started to reshuffle their ruble savings and generate an exaggerated demand for durable goods or convert their savings into foreign currency," Evgeny Koshelev and Brian Hilliard of Société Générale said in a report this week.

Andrew Kenningham, the senior global economist at Capital Economics in London, projects an ugly period after what he described as "the dramatic escalation of Russia's crisis" earlier in the week.

"There is now little doubt that Russia is heading for a deep recession," Mr. Kenningham said in a report.

"In the near term, the central bank may hike rates further and perhaps introduce capital controls," he added.

"And, next year, there may be a string of corporate and bank defaults."

Mr. Kenningham, by the way, believes that Russia's troubles will have an impact outside its borders, but that will be muted because trade and banking links with the rest of the world are too insignificant for "major global implications."

Mr. Putin, whose country is also struggling under the weight of Western sanctions and the troubles in Ukraine, did not offer any new remedies this week, saying instead that he and his colleagues are on the right track

The Russian president also said he believes his economy will rebound in time.

Well, sir, Greece and Iceland each experienced "a trying period," too.

84 … 81 … 80 …
So as to not sound too high and mighty here, we'll note that Canada, too, is going through a "trying period."

But if one were to adjust down to Mr. Putin's way of looking at things, in our case maybe it's just a blip.

Make no mistake: The collapse in oil prices is going to take a toll on Canada, whose currency has declined amid the rout, though has hardly crashed.

That toll should be largely regional in nature, smacking the oil provinces of Alberta, Saskatchewan and Newfoundland and Labrador, while helping out other regions, notably the manufacturing areas of Ontario and Quebec.

The latter two, economists say, should be bolstered by lower energy costs and the weaker Canadian dollar.

Indeed, Toronto-Dominion Bank forecast this week that Ontario will bump Alberta out of the No. 1 spot to lead Canada's provincial economies in average economic growth over the next two years.

In the oil sector, as The Globe and Mail's Jeff Lewis reports, we're already seeing spending being slashed.

And economists have quickly cut their forecasts for overall economic growth next year.

"So pick your economic indicator – real or nominal GDP, business investment, employment, corporate profits, merchandise trade, housing starts – and oil's deep dive will leave a notable mark on prospects in a handful of provinces in 2015," CIBC World Markets warned this week.

As for the loonie, as Canada's dollar coin is known, the projections are also getting ever lower.

TD, for one, expects the Canadian dollar to hit a low of 84 cents U.S., while BMO Nesbitt Burns suggests the 83-cent mark by late next year, CIBC forecasts 81 cents over the next few quarters, and Nomura Securities eyes 80 cents by mid-2015.

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Tickers mentioned in this story

Study and track financial data on any traded entity: click to open the full quote page. Data updated as of 28/03/24 4:15pm EDT.

SymbolName% changeLast
AAPL-Q
Apple Inc
-1.06%171.48
CADUSD-FX
Canadian Dollar/U.S. Dollar
-0.09%0.73786
CM-N
Canadian Imperial Bank of Commerce
+1.3%50.72
CM-T
Canadian Imperial Bank of Commerce
+1.13%68.67
GM-N
General Motors Company
+1.7%45.35

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