Russian Crisis
Russian Crisis 1988
Introduction
The Russian Financial crisis(also called “RUBLE” crisis) hit Russia on 17 August 1998. It was triggered by the Asian Financial crisis, which started in July 1997. During the ensuing decline in world commodity prices, countries heavily dependent on the export of raw material where among those most severely hit. Petroleum, natural gas, metals and timber accounted for more than 80% of Russian exports, leaving the country vulnerable to swings in world’s prices. Oil was also a major source of government tax revenue.
The countries involved in the Russian Financial crisis involved:
Baltic States
The Russian crisis affected Baltic countries more than was expected. Estonia, Latvia and Lithuania sank into recession.
Belarus
Overall, economic activity slowed down substantially in the immediate aftermath of the Russian crisis, with output growth falling from about 8.5 percent in 1998 to 3.4 percent in 1999. Both exports and imports contracted substantially, resulting in a drop in the current account deficit from 6.1 percent of GDP in 1998 to 2.2 percent of GDP in 1999.
Kazakhstan
The Russian crisis was a hard hitting blow to the Kazakh economy. Kazakhstan lost its price competitiveness and its exports were in shambles.
Moldova
Moldova received an IMF special mission advising the government on how to cope with the effects of the Russian crisis. Russia bought at that time 85% of Moldova's wine and brandy and most of its canned goods and tobacco. After the rouble crashed, most Russian importers put deals with Moldova on hold.
Ukraine
The crisis cost a lot for Ukraine: the Hryvnia devaluated by 60%, domestic prices increased by 20%, the National Bank of Ukraine lost 40% of its gross reserves.
Uzbekistan
In the central Asian state, the government banned the free unlicensed sales of food, most of which is imported from Russia, as a preventative measure against price rises and panic.
Causes
In 1993, the Russian
Introduction
The Russian Financial crisis(also called “RUBLE” crisis) hit Russia on 17 August 1998. It was triggered by the Asian Financial crisis, which started in July 1997. During the ensuing decline in world commodity prices, countries heavily dependent on the export of raw material where among those most severely hit. Petroleum, natural gas, metals and timber accounted for more than 80% of Russian exports, leaving the country vulnerable to swings in world’s prices. Oil was also a major source of government tax revenue.
The countries involved in the Russian Financial crisis involved:
Baltic States
The Russian crisis affected Baltic countries more than was expected. Estonia, Latvia and Lithuania sank into recession.
Belarus
Overall, economic activity slowed down substantially in the immediate aftermath of the Russian crisis, with output growth falling from about 8.5 percent in 1998 to 3.4 percent in 1999. Both exports and imports contracted substantially, resulting in a drop in the current account deficit from 6.1 percent of GDP in 1998 to 2.2 percent of GDP in 1999.
Kazakhstan
The Russian crisis was a hard hitting blow to the Kazakh economy. Kazakhstan lost its price competitiveness and its exports were in shambles.
Moldova
Moldova received an IMF special mission advising the government on how to cope with the effects of the Russian crisis. Russia bought at that time 85% of Moldova's wine and brandy and most of its canned goods and tobacco. After the rouble crashed, most Russian importers put deals with Moldova on hold.
Ukraine
The crisis cost a lot for Ukraine: the Hryvnia devaluated by 60%, domestic prices increased by 20%, the National Bank of Ukraine lost 40% of its gross reserves.
Uzbekistan
In the central Asian state, the government banned the free unlicensed sales of food, most of which is imported from Russia, as a preventative measure against price rises and panic.
Causes
In 1993, the Russian