The crisis in Ukraine has dealt Russian assets a sharp blow. The stock market fell by a fifth in the first four months of 2014 as over $60bn fled the country; the rouble is down by almost 10% this year. Yet Russia “appears to hold strong economic as well as military cards”, says The Economist.
Because it supplies 24% of the EU’s gas and 30% of its oil, it’s “hard for the West to design sanctions that do not backfire”. Russia’s relatively healthy balance sheet suggests it can ride out a period of capital outflows. It has a current account surplus [...]
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