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Russia Implements Economic Reforms

© Bryan Johnson

In an attempt to get its economic house in order, Russia has moved to implement several key economic reforms:

1) Elimination of Currency Restrictions : Russia eliminated rules restricting ruble trading and conversion, a move the government made several months ago to shore up the value of the tumbling currency. The new move is welcomed by investors, who have been frustrated by the inability to convert their Russian earnings into other currencies;

2) Removal of bank licenses : The Russian government withdrew several bank licenses from insolvent banks. This move was aimed at forcing these banks to close or restructure their debt.

However, despite these moderate reforms, Russia still faces potential massive economic hardship, as it has been unable to meet its international debt obligations, much of which are now in default. As a result, Russia's credit rating has slipped significantly.

Some analysts predict that despite the possiblity of more IMF aid, Russian economic conditions will continue to worsen. Some predict that Russia will respond by printing money and closing its border to trade, investment, and currency flows.

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