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Russian Central Bank Forecasts Winter of High Inflation

Russian Central Bank Forecasts Winter of High Inflation | Global Leaders | Scoop.it

Russia's surging inflation rate will remain high through spring of next year, propelled by the devaluation of the ruble currency and the steep cost of Moscow's bans on food imports from Western countries that sanctioned it over Ukraine.

Anne Egros's insight:

Russia’s surging inflation rate will remain high through spring of next year, propelled by the devaluation of the ruble currency and the steep cost of Moscow’s bans on food imports from Western countries that sanctioned it over Ukraine.

 

The rapid tumble of the ruble, which has lost a third of its value so far this year, has accelerated inflation by raising the price of foreign imports.

 

The Russia ban on Western fresh product imports has triggered a rise in locally produced food prices such as pork and poultry.

Lack of competition from cheaper imported products is  benefiting domestic producers. so for Russian consumers everything is getting more expensive.

 

However sanctions are not the major problem when it comes to the ruble,. The two main factors that contribute to weakening  of the Russian economy are:

 

1-The costs of borrowing money, which increased even more than a year before the Western sanctions over Russian banks were applied in September.

 

2–The sharp decrease of  the oil price under $100 per barrel. The OPEC announced late on November 27 that the oil cartel would not cut production, sending the price of oil  around $70 per barrel.  The announcement also sent the Russian ruble lower to the U.S. dollar and euro. The ruble dropped to over 50 against the U.S. dollar late on November 28 and dropped to 62.03 against the euro in early trading recovering to 61.41 by the close of the day.

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Ukraine Crisis? U.S. Trade With Russia Grows in March Despite Standoff

Ukraine Crisis? U.S. Trade With Russia Grows in March Despite Standoff | Global Leaders | Scoop.it
Rising U.S.-Russian tensions over the continued disorder in Ukraine didn’t derail trade between the two Cold War rivals in March.
Anne Egros's insight:

U.S. Good exports to Russian totaled just $11 billion in 2013 

 

Russia doesn't rank among the top 15 U.S. trading partners, according to the Commerce Department.

 

So far this year, total trade with Russia ranks just ahead of Ireland, and behind that of Colombia and Thailand.

 

Russia supplies oil, metals and fertilizer to the U.S. and imports American machinery, vehicles and food.

 

Europeans are much more dependent than the U.S. on imports and exports with Russia:

 

Up to 75% of Foreign Direct Investment stocks in Russia come from EU Member States  

 

Russia is the third trading partner of the EU and the EU is the first trading partner of Russia.                                                                      

Source : http://ec.europa.eu/trade/policy/countries-and-regions/countries/russia/

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