While the conflict in South Ossetia is likely to have little direct impact on the Russian economy, financial markets have been hit hard by a rise in political risk. The currency has dropped by 3% since the start of August, while equities are down by over 30% from their highs earlier this summer. Fears that Russia might soon turn its attention to Ukraine have hit financial markets there as well. Ukrainian equities are down by 4% on the month, while bond spreads have widened by 15bps.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services