The recent fall in oil prices, coupled with the drop in the ruble, has revived memories of 1998 in Russia, when similar developments culminated in a government debt default. The state of Russia’s public finances has improved dramatically since then, making a government default in the near future highly unlikely. That said, if oil prices stay at current levels over the next decade, government debt will reach a level at which investors may once again start to worry about the sustainability of Russia’s public finances.
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