The Sanctions Imposed on Russia are affecting the marketsadmin 6 March 2022
Almost The entire world is imposing historical sanctions on Russia for invading Ukraine. The United States and the European Union believe that they can economically punish Russia by such sanctions. Such sanctions can create heavy domestic pressure on Vladimir Putin to stop the war. The unexpected sanctions imposed on the Russian government and its advocates have made a considerable impact on the economy of this country. The Ruble value has fallen about 30% in about a week after the beginning of the war. In addition, Russia’s stock market has been shut down.
The United States and the European Union are increasing the sanctions every day. Many big companies such as Microsoft, Apple, and Shell no longer provide their services in Russia. Other big companies are also leaving Russia one by one. This has led to a wave of dissatisfaction among people. Russia has the 11th largest economy in the world, but these pressures are pushing it to the brink of collapsing. The new sanctions may even lead to a regime change in Russia. According to Blinken, the US Secretary of State, “the Russian people will suffer the consequences of their leaders’ choices.” That’s why the possibility of seeing a big change in Russia is very likely.
Russians’ concerns are affecting the markets
The Central Bank of Russia has no longer access to about $640 billion of its foreign currency reserves. This situation pours fuel on the falling value of the Ruble. Many Russian citizens are concerned about the decreasing value of the Ruble. They are trying different ways to protect the value of their capital by exchanging their Rubles for other assets. As a result, many people are buying safer assets such as gold, and demands are increasing the prices.
The oil market is also experiencing unbelievable prices as the oil supply has increased in the market. As one of the most important oil suppliers, Russia cannot find many customers for its oil these days. The oil prices have skyrocketed in the markets, and each oil barrel is being traded for about $110. Forex market traders are now more careful than ever because they have faced great opportunities to make big profits.