The recent decline in oil prices has had a huge impact on the Russian economy over the past few weeks. This has put Russia on the path towards a deep recession and a double digit inflation in 2015, as reported by Russian Officials today. The Russian government has instituted a bail out similar to the U.S. bailout from years ago to help save the Rouble (Russia’s currency).
The economy is slowing even more as problems in the Ukraine are discouraging foreign investment and encouraging capital flight.
The Russian government is now taking what it feels are necessary steps to support financial institutions so that they can address the worsening currency crisis over the past weeks. This crisis has included interest rate hikes. Financial analysts are currently unsure and very pessimistic about the outcome for Russia’s economy and the outcome of the Rouble. It looks like this world power is in for a long hard fight to save their economy.