Source: Investing.com |
With fresh promises of aid from the West, including possibly
the IMF, the near-term financial situation could potentially
be stabilized. The political realities however look grim. It
is not clear if the revolutionaries in Kiev will support the
Parliament and the interim government. It is also not
entirely clear if the nation as a whole supports the
revolution. The probability of more violence - possibly on a
broad scale - remains high.
History is not on Ukraine's side. The Ukrainian people have
been under some form of control of one or several of their
neighbors for centuries. Other than during the years
following the collapse of the Soviet Union and a short
period at the beginning of the 20th century, the nation has
almost no history of independence. It may take more than an
ouster of an unpopular leader to create an independent state
with a democratic government.
Even after the collapse of the USSR, the Ukrainians have had
a tough time moving away from the Russian sphere of
influence - in large part due to their reliance on Russian
energy resources. The Russians in turn are unlikely to just
let Ukraine go. That's why the latest developments in Crimea
(see
story) are especially troubling.
The Russian ruble, which has already been under pressure as a result of the central bank policy, has traded to new lows in part due to potential escalation of tensions in the region. The situation remains quite fluid and more volatility is to be expected.
The Russian ruble, which has already been under pressure as a result of the central bank policy, has traded to new lows in part due to potential escalation of tensions in the region. The situation remains quite fluid and more volatility is to be expected.
Source: Investing.com (chart shows the euro appreciating against the ruble) |
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