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Significance

Russia has experienced severe economic distress since it invaded Ukraine on February 24. Rising geopolitical risk and stringent sanctions imposed by the United States, the EU and allies have caused a collapse in the value of the ruble, a stock market crash and a massive hike in interest rates.

Impacts

The high ruble value of export revenues will mitigate the fiscal costs of sanctions.

Comparative fiscal strength will help fund defence and some social protections.

Oil prices will rise if Moscow limits sales of oil or gas.

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