How the situation in Ukraine affected the economy of Russia Essay

How the situation in Ukraine affected the economy of Russia - Essay Example It’s noteworthy that the essay demonstrates the short review of the main economic points of Russia, namely: exchange rates, interest rates, inflation risks and GDP, chart - CPI inflation, the economic sanctions and gives the brief conclusion of the situation. The Russia-Ukraine crisis has caused grievous economic consequences on the Russian economy, especially due to economic sanctions imposed on Russia by the Western countries. Since the beginning of the Ukraine and Russia conflict, the Ruble has been on a downward trend making it the worst performing currency globally after the annexation of Crimea. The diagram in the paper shows the Ruble has been weakening after the Ukraine Crisis began. The diagram in the paper demonstrate how interest rates have been increasing in the Russian economy after the country’s currency exchange rate started declining and inflation increased forcing the Bank of Russia to increase interest rates a move that drew similar reaction from lenders in the banking system resulting in high interest rates in the domestic market. Since the start of the Ukraine-Russia conflict, inflation rates in Russia have been accelerating in because of a weak currency that has made imports expensive hence raising the rates of inflation in the economy. The paper contains diagrams of inflation in Russia (2014) and Russian GDP. Russia was slapped with economic sanctions due to its entry into the Ukraine conflict by several Western nations such the U.S. and EU concerning trade.