The political tension in Ukraine has led to a significant drop in the value of the rouble, which has fallen by 11% against the euro since January 2014. The exchange rate stood at around RUB50 to the euro during the first days of March. Europe is one of Russia’s main import partners and further devaluation of the rouble will increase fears of snowballing import prices and inflation. The growing tension and possible trade restrictions from the US and Europe pose a threat to the country’s import-dependent markets - machine tools, electric engines and automotive parts - these being important components in Russia’s main heavy industries.
Rouble/Euro Exchange Rate, 1 February 2013 – 2 March 2014
Source: European Central Bank