what caused the "financial crisis" in Russia in 1998? was it really due to economic sanctions led by the US ? if so, why?
how long it lasted and who gave in or not? when and how? why?
was it similar to the same "power play" that maybe happened in Argentina ? what about S.E. Asia? We all heard it was due to their "financial problems"...but was it really like Venezuela is now...due to political /economic sanctions for political reason?
- Gray BoldLv 71 month agoFavourite answer
Declining productivity, a high fixed exchange rate between the ruble and foreign currencies to avoid public turmoil, and a chronic fiscal deficit were the reasons that led to the crisis. The economic cost of the first war in Chechnya, estimated at $5.5 billion (not including the rebuilding of the ruined Chechen economy), also contributed to the crisis. In the first half of 1997, the Russian economy showed some signs of improvement. However, soon after this, the problems began to gradually intensify. Two external shocks, the Asian financial crisis that had begun in 1997 and the following declines in demand for (and thus price of) crude oil and nonferrous metals, severely impacted Russian foreign exchange reserves. The inability of the Russian government to implement a coherent set of economic reforms led to a severe erosion in investor confidence and a chain reaction that can be likened to a run on the Central Bank. Investors fled the market by selling rubles and Russian assets (such as securities), which also put downward pressure on the ruble. This forced the Central Bank to spend its foreign reserves to defend Russia's currency, which in turn further eroded investor confidence and undermined the ruble. It is estimated that between 1 October 1997 and 17 August 1998, the Central Bank expended approximately $27 billion of its U.S. dollar reserves to maintain the floating peg.
It was later revealed that about $5 billion of the international loans provided by the World Bank and International Monetary Fund were stolen upon the funds' arrival in Russia on the eve of the meltdown.
- AnonymousLv 71 month ago
Russia after the collapse of the USSR was a complete mess to begin with. It would be a surprise if it didn't run into serious trouble.
- ?Lv 61 month ago
You would have to read a book to analyze the downfall of the USSR. To briefly summarize, marxism failed again. Instead of government by the people, marxism is government for the people by a select few.
Everything becomes centralized especially monetary and food production by which to control the masses. Does this sound familiar? The US is headed in this direction by way of mass media propaganda and censorship. Civil rights such as free speech, freedom to assemble, the right to bear arms are all in danger.
- Anonymous1 month ago
The Soviet Union collapsed on its own inadequacies. Reagan was the lucky President who took credit for it without actually doing anything to cause it...