In March of 2014, the European Union and the United States imposed economic sanctions on Russia.
Prior to the sanctions, Russia gave value to the Ruble through a dual currency basket that consisted of the Euro and U.S. dollar.
Russian state reserves maintained gold reserves and foreign exchange reserves.
From 2012 through January 2014 the price of the Euro increased by 24.54%. The price of the U.S dollar increased by 14.95%.
The economic sanctions impacted many aspects of Russia’s economy and in this analysis the focus is on the impact the sanctions had on the value of the Russian Ruble.
- The price of dual currency increased by 63.28% by the summer of 2016. The maximum increase was 101.96% at the beginning of 2016.
- The price of the Euro increased by 46.00% when compared to the price prior to the sanctions. The maximum increase was 78.98% in early 2016.
- The U.S dollar had a maximum increase of 128.07% in early 2016. By the summer the price increase was 82.95% when compared to the price of the U.S dollar prior to the sanctions.
- Economic sanctions devalued the Ruble and created inflation.
Russia attempted to combat the sanctions through its reserves.
- As the Euro, U.S Dollar and the price of Gold increased, Russia increased the quantity of gold in its gold reserves.
- As the Euro, US dollar and the price of Gold and other heavy metals increased, Russia decreased the quantity of foreign exchange reserves.
- Russia’s monetary policy brought little relief to the population but there was an increase in the value of the Ruble by the summer of 2016.
One of the sanctions taken by the European Union and the United States after Russia invaded Eukraine was to sanction the importation and exportation of Russian gold.
0 Comments