Business-Finance Paper -Read FULL directions Essay

Business-Finance Paper -Read FULL directions - Essay ExampleAlready the countrys currency, the rouble, had been the worst among currencies around the world in terms of overall performance for 2014, losing 48 percentage of its value over the past year. As of January 20, 2015, the value of the ruble was pegged at around $65.2765 in the trading markets. Dropping oil revenues and the falling value of the ruble is compounded by threats from the military ratings agencies to reduce Russias credit rating to junk, which would further increase the costs and risks of borrowing for Russia relative to international financial markets. This would further cripple the countrys chances of being able to borrow property to finance its budget deficits. Already, the country had been using its dollar reserves to prop up the rubles value, spending about 20 percent of its heart and soul dollar hoard for the purpose, so that what had been a formidable reserve had been reduced to $386 billion. The fate of t he reserves level of dollars for Russia is tied to the price of oil, and at $45 a barrel, the country is expected to be able to finance at least three years of budget deficits and eat through about half of its flow rate dollar reserves. With the delivery expected to contract in 2015, the challenge for Russia is to be able to prudently make use of its dollar reserves to keep the economy afloat and the ruble from falling off a cliff in terms of purchasing power. The expected budget deficit for 2015 is about two percent of GDP, and the sanctions on Russia by the west due to the formers meddling in Ukraine, plus the threat of a credit rating downgrade, all press to make it difficult for Russia to keep the economy on an even keel moving forward (Andrianova).The situation amounts to a looming fiscal crisis for the Russian government, in another(prenominal) words. The deficit is growing because the oil price drop seems to be something that will not correct soon. Meanwhile, the credit d owngrade and the sanctions from the Ukraine situation means that