Wednesday, August 19, 2015

Putin's economy may be in a lot worse shape than previously thought

Rob Garver, The Fiscal Times
Aug. 18, 2015, 7:55 PM

The Russian economy is in a full-blown recession and, according to analysts that study it, may be in even worse shape than is apparent to outside observers.

Last year, in addition to harsh international sanctions imposed over the invasion of Crimea, the Russian people suffered a massive devaluation of the ruble against international benchmark currencies.

It took 30.4 rubles to buy one U.S. dollar in January 2013. By the end of January 2015, the price had more than doubled to 69.5 rubles to a dollar.

Much of the fall was driven by the decline in oil prices, which are key to Russia’s energy-heavy economy.

The Kremlin spent tens of billions of dollars in foreign currency reserves in a largely futile attempt to prop up the ruble, and was eventually assisted by a firming of oil prices in the early part of this year, which drove the exchange rate down to about 50 rubles to the dollar.

(More here.)

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