How US & European Union Sanctions Impact Russia Essay

How US & European Union Sanctions Impact Russia - Essay Example They majored on this sector because they had background information that Russia’s domestic budget relied heavily on the sales of this product. The result from terrible double sanctions together with sliding oil prices, in November 2014 the Russian economy decreased by 0.5 percent that was that decline experienced over the period of five years. To the Russian economy, some adverse effects were experienced because of these sanctions and drifting of oil prices (Cotella). As per the trading record, the value of the dollar against the Russian currency dropped by about 20 percent on December 26, 2014. The exchange market had reached 80 rubles for one US dollar. Since the year 1998, this was the highest recorded rate, and this ventured the country to a debt default after the disarray from the previous crisis. In the initial rise of the dollar price, seemed ineffective. The later staged its way and staged its biggest rally in the duration of 16 years, and this prompted to scramble so that they could meet the tax deadline. The Russian government wanted to put this into practice by forcing the exporters to convert their foreign exchange into Russian currency (Jones and Whitworth). The Russian central bank found itself in unexpected and vast scrambling rates, and this was targeting to rectification in giving a ruble a hand. Currency speculation and crushing blow were another meaning of the experienced higher rates. The potential spark of massive short covering was an anticipation of turnaround of the ruble to maintain the position that it was holding. The consumers and corporations also faced the tragedy of higher rates of interest when was a havoc (THE MONTH IN BRIEF: IS Oil Installations Attacked, Libyan Output Recovers And EU And US Prepare More Sanctions Against Russia). The combinations of sanctions and reduced oil prices lead to depression and rises. The Russian central bank said that in a the circumstance where crude oil averages 60 dollars per barrel on