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Rouble`s woes reap mixed harvest

2015-04-13 09:44:35Source:China DailyAuthor:

China's weather forecasts have become less accurate due to decline in the value of the Russian rouble, the National Meteorological Center said on its official microblog earlier this year.

The center's staff later explained that Russia had stopped providing timely upper air data through radiosonde observations due to a funding cut, thus affecting China's weather forecasting service.

Radiosonde observations can make direct internal measurements of air temperature, pressure, humidity and wind power at various levels. Without such observations, this crucial data could only be obtained from satellite remote sensing, which is far less accurate.

More than 4,500 Web users reposted the message on the center's microblog. A microblogger asked, "Does it mean the cold air from Siberia will visit China without knocking at the door?"

Fitch Ratings announced on Jan 9 that it had downgraded Russia's long-term foreign and local currency issuer default ratings to "BBB-" from "BBB".

"The economic outlook has deteriorated significantly since mid-2014 following sharp falls in the oil price and the rouble, coupled with a steep rise in interest rates," the international credit rating agency said, adding that growth may not return until 2017.

Western sanctions first imposed in March 2014 continue to weigh on Russia's economy by blocking Russian bank and corporate access to external capital markets.

The economy grew by just 0.6 percent in 2014. It is expected to contract by 4 percent in 2015, as steep falls in consumption and investment are only partially offset by an improvement in net exports, driven by a sharp drop in imports, Fitch said.

As of March 17, the US dollar rose 69.43 percent year-on-year against the rouble to 61.4496 roubles, up 6.31 percent since the beginning of 2015.

On the same day, the yuan closed at 9.8795 against the rouble, rising 12.65 percent since the start of this year and 66.14 percent from the previous year.

Although it was seen a slight reverse trend over the past few weeks, the rouble's depreciation has resulted in huge financial losses for Chinese manufacturing companies that rely on Russia as one of their major markets for foreign trade.

During the first two months of 2015, China's exports to Russia dropped 27 percent from the previous year to $5.33 billion, according to statistics from the General Administration of Customs.

Many Chinese companies suffered great losses, with their business shrinking significantly. Some had even worse experiences, such as Russian buyers defaulting on commercial contracts, refusal to take delivery of goods in a timely manner, delayed payments and sudden requests for price reductions, said Wu Hongbo, a businessman who has been in the China-Russia freight industry for many years.

 

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