Putin’s Economy Tanking

Vladimir Putin’s Crimea invasion has severely damaged Russian markets, and strategy may well be to divert attention from how poorly his economy is performing.

Russia’s recent incursion into Ukraine has sparked significant turmoil in Russian financial markets and capital outflows, both of which have in turn clouded the outlook for economic growth.

The Russian ruble has fallen sharply against the U.S. dollar.

All of this market turmoil forced Bank Rossii (Russia’s central bank) on March 6 to hike its benchmark short-term policy interest rate, which many believe to be a serious headwind for growth, even if it is eventually lowered again later this year.

Vladimir Miklashevsky, an economist and trading desk strategist at Danske Bank, says the rate hike “will seriously damage the country’s economic growth through a sharp slowdown in private consumption, an extended fall in fixed investments and increased volatility in money market rates.”

By: Alan

Alan Colmes is the publisher of Liberaland.