$40 oil could be a game changer for Russia


If oil prices tumble below $40, then the Russian Central Bank could be inspired to interrupt its rate-cutting agenda.

"If the situation on the foreign-exchange market changes as a result of a significant drop in oil prices — to $40 a barrel, with fluctuations between $40 and $45 — then the central bank will probably halt the process of cutting the rate," Kremlin economic aide Andrey Belousov told Bloomberg in an interview.

Notably, Belousov's statement does not come as a complete surprise.

Though the bank slashed rates for the fifth time this year in early August, the cut was less than expected amid a weaker ruble (and lower oil prices). Additionally, the bank took out the phrase >"ready to continue cutting," signaling a potential shift in the central bank's strategy. (by ELENA HOLODNY, Business Insider)