Russia’s Financial Meltdown

Unprecedented sanctions after Russia’s invasion of Ukraine have sent shock waves through financial markets. How will Moscow react?

• The EU, the US and the UK have set in motion a historic wave of economic sanctions against Russia. Russian banks and large companies have been cut off from global international markets.
• The measures, introduced after Russia’s invasion of Ukraine, have brought financial markets in Russia to their knees. The Ruble experienced its biggest single-day fall on record.
• The Central Bank of Russia reacted with a range of draconian measures. Benchmark interest rates were raised to 20% from 9,5%. The stock market remained closed due to fear of turmoil.
• Ordinary Russians are struggling to access their savings since a run on cash machines had already begun. Many people tried to convert their rubles into foreign currency or luxury goods.
• Economists are debating the possible implications for supply chains and Western markets. Russia is the Europe’s biggest vendor of oil and gas and plays a substantial role in food markets.
• Large Western companies are already leaving the Russian market and selling their assets. This might lead to huge losses and a reorientation in global markets.