Currency troubles could undermine support for Putin

Threat to Russia's financial stability comes at a time when relations with the West are hit by Ukraine conflict

Published Wed, Dec 17, 2014 · 09:50 PM

Moscow

RUSSIA failed to halt the collapse of the rouble on Tuesday, leaving President Vladimir Putin facing a full-blown currency crisis that could weaken his iron grip on power.

A 6.5 percentage point interest rate rise to 17 per cent overnight failed to prevent the currency from hitting record lows in a "perfect storm" of low oil prices, looming recession and Western sanctions over the Ukraine crisis.

Mr Putin has blamed the rouble's crash on speculators and the West, while a presidential spokesman on Tuesday attributed the market turbulence to "emotions and a speculative mood".

As Moscow faced up to the brewing crisis, US Secretary of State John Kerry said sanctions could be lifted swiftly if Mr Putin takes more steps to ease tensions and lives up to commitments under ceasefire accords to end the Ukraine conflict. "These sanctions could be lifted in…