The economic consequences of Russia’s invasion of Ukraine continue to unfold but this action coupled with
strong inflationary pressure and a tightening cycle for monetary policy have given rise to a challenging
beginning to 2022.
Oil has marched above $100 a barrel and commodities in general have hit all-time highs pushing inflation
further. It seems Russia has been laying down plans for its moves for some time.
Russian debt is in the hands of Russians, rather than invested in US Treasuries, whilst its reserves of gold
have been bolstered, now at a high point of $635bn. Sanctions will bite but will take time to exact a toll and
the world watches Ukrainian bravery proving more problematic to Putin’s forces than they had reckoned for.
In Russia the ruble has collapsed, and interest rates have hit a stratospheric 20%. Markets have factored in
these events but remain understandably jittery as history unfolds.