Russian Financial Crisis: An Overview

Background

The Russian financial crisis, also known as the ruble crisis or Russian flu, began in Russia on August 17, 1998. It resulted in the Russian government and the Central Bank of Russia devaluing the ruble by 44% and suspending ruble convertibility.

Causes

The crisis was caused by a combination of factors, including high foreign debt, a fixed exchange rate, a widening trade deficit, and declining investor confidence.

Stock Market Crash

In December 2014, the Russian stock market experienced large declines, with the RTS Index falling by 30%. This was due to a number of factors, including the fall in oil prices, the Ukrainian crisis, and Western sanctions.

Banking Crisis

Russian banks have faced a number of crises in recent years. The most recent banking crisis took place in waves, with the biggest one happening in 2017. Several banks were forced to close, and the government had to provide financial support to the banking sector.

Western Sanctions

Western sanctions imposed on Russia in 2022 have had a significant impact on the Russian economy. The sanctions have targeted the banking sector, energy sector, and other key industries.