Russia’s invasion of Ukraine in February this year sent shockwaves through the global economy. A series of sanctions by the US and other western countries including freezing the assets of the Russian Central Bank and its oligarchs, and expulsion of Russian banks from the Society for Worldwide Interbank Financial Telecommunications (SWIFT) system, followed.

The Russian economy is hurting but managing to stay afloat. Given the costs of war and sky-rocketing domestic prices, Russia’s GDP growth began contracting from April 2022. However, the pressure has been easing slightly since June 2022. Inflation has been a major worry, raging at 20-year high and the highest compared with its peers.

Exports have been a saviour for Russian economy, up 42 per cent in H1 FY23 as compared with the same period a year ago. This points towards a failure of western sanctions as most other countries preferred to continue trading with Russia. Higher commodity prices have also helped exports.

With trade surplus expanding, the ruble has appreciated sharply since April 2022 and is currently 21 per cent higher since the beginning of this calendar.

Russian stocks, too, witnessed recovery after slumping in February. International reserves have depleted, but have remained above $500 billion.

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