Skip to comments.Central Asia Faces Financial Chaos As Russia’s Economy Collapses
Posted on 03/13/2022 10:11:47 AM PDT by TigerLikesRoosterNew
Central Asia Faces Financial Chaos As Russia’s Economy Collapses
By Eurasianet - Mar 13, 2022, 10:00 AM CDT
Russia’s war in Ukraine has sent its economy into a nosedive.
Central Asian economies are highly exposed to Russia.
A collapsing Russian economy risks mutating into a deadly pathogen for Central Asia.
Russia’s invasion of Ukraine and the Western sanctions in response have left former Soviet states in Central Asia facing economic chaos. Since Vladimir Putin launched his war on February 24, the ruble has collapsed by 50 percent with no bottom in sight. Russia has enacted currency controls reminiscent of the early 1990s and telegraphed plans to default on foreign debtholders.
The uncertainty is gripping Central Asia, where Russia is a top trading partner and the source of critical remittances. Local currencies rise and fall with the ruble.
In short, Central Asia’s economies are highly exposed to Russia.
Kazakhstan was the first to respond to the crisis, raising its baseline interest rate from 10.25 percent to 13.5 percent just hours after the war began. The National Bank rapidly intervened in the currency market, selling U.S. dollars to protect the tenge.
Nur-Sultan also announced a new anti-crisis plan promising further intervention in forex markets and a new “tenge deposit protection program.” Under this attempt to forestall bank runs, a 10 percent payment will be deposited into tenge-denominated bank accounts next February, tax-free. This effectively amounts to a further interest rate hike and will likely negatively impact investment, already bound to be tempered by Russia’s economic implosion and market uncertainty after Kazakhstan’s own nationwide unrest this past January.
(Excerpt) Read more at oilprice.com ...
China will take care of them.
Yep, China goaded Russia into this war knowing ulimately it would weaken Russia, for China to come in and take the spoils.
I think NATO goaded Russia into it.
This is my favorite site for keeping up with energy.
I think NATO stumbled blindly into it.
Russia has 2 years worht of foreign reserves, very little debts and plenty of gold. Russia’s economy is also using a lot of cash and means we do not see.
Putin’s war against Davos is a real one and I am not so sure the endebted Covidist globul warming endebted Davos camp whose dollar and Euro is now no monopoly is that good in a shape to make judgment on Russia.
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