Sanctions on Russia over its actions in Ukraine have compounded the impact of oil's plunge but Moscow may have the financial buffers to hold out for two years without a change in policy.
European governments meet next week to review the sanctions, imposed after Russia annexed Crimea last March and threw its support behind pro-Moscow separatists in eastern Ukraine. The West's response centred first on financial and travel restrictions on key individuals but by mid-year it had effectively cut off overseas funding to corporate Russia.
Although there was skepticism at the outset, these measures have hurt, particularly combined with the parallel collapse in oil, Russia's major export. Their impact has far outweighed Russian counter punches to European agricultural imports or the cancellation of its South Stream gas export pipeline through southern Europe.
Many dispute U.S. President Barack Obama's assertion that Russia's economy is now 'in tatters' -- a jobless rate of just over 5% and total external debts of about 30% of national output are just two raw numbers that would make some European leaders jealous. But the fabric has been badly damaged.
Reeling from 50% tumbles in both oil prices and the rouble, output is forecast to contract by up to 5% this year, inflation is already well into double digits and corporate finance has all but seized up.
According to Thomson Reuters data, Russian companies have sold only eight foreign currency bonds totaling less than $5 billion U.S. since last March and none since November. That compares with 52 bonds worth about $34 billion U.S. in the prior 12 months.
