As the central bank of Russia appears to be losing control of its currency market, the global financial media is warning about a possible financial crisis there. Some experts have even drawn parallels to August 1998, when a Russian default caused global economic and financial disruptions. Against this background, here are the seven things to know about what’s going on in Russia now.
- Buffeted by Western sanctions and lower oil prices, Russia has suffered a significant decline in net foreign earnings. Capital is fleeing the country, and corporations and households are looking to switch out of rubles and into dollars and other “hard” currencies. The result has been a sharp fall in both international reserves and the value of the ruble, contributing to a rising threat of domestic financial turmoil.
- At the same time, it is only a matter of time until the country’s economy has to deal with…
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