Worldwide Markets Affected by Russian Ruble Crisis

Last week, the financial world was shaken by an economic crisis in Russia. Russia's ruble currency has fallen by 50 percent since January 2014 against the dollar - the exchange rates reaching 80.1 percent. At first, Russian authorities raised the interest rate from 6.5 to 17 percent but this failed to stabilize the situation. Despite President Vladimir Putin's promise that Russia will recover, economists predict that Russia's gross domestic product will suffer a 3.6 percent fall in 2015 and the country's economy will slide into recession.

Sanctions and Oil-centered Economy

While economists are not synonymous in their explanations of the cause for the ruble's devaluation, it is widely agreed that the war-related sanctions laid on Russia had a big part in the crisis. As remembered, 2014 was characterized by Russia's repeated military interventions in Ukraine while disregarding international pleas for peace. Most notably, the Crimean crisis in which Russia invaded the Crimean Peninsula was the trigger for widespread sanctions on the country.

One of the major building blocks of Russia's economy is oil and energy related exports. With Russia's economy already unbalanced, the economic sanctions and global turndowns in demands led to a decrease in prices for a single oil barrel, something which hit Russia's economy right in the face. This was joined by the increased oil production by other states which took a bite out of Russia's market share, so to speak.

Ruble Stabilized, For Now

The hiking interest rates went down to stabilize at 11 percent last Tuesday while the ruble's exchange rate stabilized at 53.50 in Moscow's exchange, but the long-term consequences are yet to have shown. By the end of the year, inflation in Russia is expected to hit 10.1 percent – a stark difference compared to the 5.5 percent Russia's central bank had when 2014 began. With the number expected to reach 12-15 by next year, spectators fear a repeat of the financial crisis Russia suffered in 1998.

Financial Markets and Betting 

The last two weeks were certainly interesting for traders and financial punters, with the ruble's downfall affecting worldwide markets. Financial betting has become very popular in recent years due to its relative simplicity and accessibility; the financial betting options offered at bet365 serve as a good example.

Punters can bet every weekday between 08:00-21:00 UK time on a wide range of index markets including FSE, Wall Street, Hong Kong, SENSEX and DAX, with bets also available on many currency pairs. Betting on currencies is very popular and it doesn't affect the real stock market. Getting to know how the global market works gives an added value to the overall experience as can be seen in the ruble's case.