Russia-Ukraine War: Russia hikes policy rates historically, from 9.5 per cent to 20 per cent

Russia-Ukraine War: Russia hikes policy rates historically, from 9.5 per cent to 20 per cent

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new Delhi. Russia-Ukraine War : After attacking Ukraine, America, Britain and European countries have imposed many types of economic sanctions on Russia. The transactions of many big companies with its central bank have also been banned. Along with the central bank there, many other banks have been taken out of the SWIFT system.

Frustrated by this, Russian President Vladimir Putin has made a historic increase in policy interest rates in a hurry to handle his economy. Russia has increased interest rates from 9.5 percent to 20 percent amid economic sanctions. This is the highest level in two decades i.e. 20 years.

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Inflation will increase all-round, cost will increase

This move of Russia is a matter of concern for the common people along with the economy there. This will not only worsen the condition of the economy, but will also lead to an all-round increase in inflation. Getting loans for business will become expensive. Production cost will increase. From food to drink, the price of everything will increase. Ajay Kedia, managing director of Kedia Advisory, says that raising interest rates in times of war is not a new thing. Whenever there have been such wars, the central banks of the respective countries have increased the interest rates.

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Sanctions have a bad effect on Russia’s economy

As part of the crackdown against Russia, the European Union has stopped the management of the Reserve Asset of the Central Bank of Russia. On Saturday, Russia was banned on SWIFT financial payments. An attempt has also been made to block Russia’s reserves of about $ 640 billion, so that they could not use this fund. This has had a bad effect on the economy of Russia. Experts say that the Russian Central Bank has taken this step to stop panic selling.

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Ruble at all-time low, sale of securities prohibited

The Russian Central Bank has prohibited the sale of Russian securities to foreign investors and brokerage houses. In fact, Europe and America have blocked much of Russia’s reserves of $ 640 billion. Amid the attack on Ukraine, the Russian currency ruble fell by nearly 30 percent on Monday and reached an all-time low level against the dollar. Against the dollar, the ruble reached the level of $ 117.

indirect benefits to india

Ajay Kedia says that this move of Russia will not directly affect India. But, indirectly India along with other importing countries will benefit from this. In relation to India, he said that we export crude oil from Russia besides defense equipment and other items. India will benefit on the import front due to 30 per cent depreciation in the ruble and strengthening of the rupee against the dollar.

Tags: economy, inflation, Interest Rates, Russia ukraine war

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