View source for Financial market reaction to the Russo-Georgian War

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{{Russo-Georgian war}}
[[Image:RusFinCris.PNG|left|thumb|300px|Major Russian stock market [[RTS Index]] with [[S&P 500]] and Oil Spot Prices. All data are in percentages to May 1, 2008 values. '''A''' - [[Vladimir Putin]] criticises [[Mechel]]; '''B''' - [[2008 South Ossetia war]] starts; '''C''' - [[International recognition of Abkhazia and South Ossetia|Recognition of Abkhazia and South Ossetia - by Russia]]; '''D''' - [[Alexei Kudrin]] "no systematic crisis" speech; '''E''' - measures to save major banks are adopted by the Russian government; '''F''' - [[2007–2008 financial crisis]] ]]
Just on 8 August 2008, the day Russia launched a full-scale invasion of Georgia, Russia lost six billion dollars, according to the finance minister of Russia.<ref name="SWP">{{cite web|url=http://www.swp-berlin.org/common/get_document.php?asset_id=5524 |title=The Caucasus Crisis |publisher=[[German Institute for International and Security Affairs]] |date=November 2008 |url-status=dead |archiveurl=https://web.archive.org/web/20081201053042/http://www.swp-berlin.org/common/get_document.php?asset_id=5524 |archivedate=1 December 2008 }}</ref> [[Russian ruble]] fell.<ref>{{cite news |url=http://www.bloomberg.com/apps/news?pid=20601103&sid=aWBTfkW.mzGk |title=Putin Says `War Has Started,' Georgia Claims Invasion (Update4) |author1=Torrey Clark |author2=Greg Walters |publisher=[[Bloomberg L.P.]] |date=8 August 2008 |archiveurl=https://archive.today/20120729172221/http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aWBTfkW.mzGk |archivedate=29 July 2012 |url-status=dead}}</ref><ref>{{cite web |url=https://www.reuters.com/article/us-hjp-russia-georgia-markets-idUSL841064520080808 |title=Russian rouble, stocks hurt by Georgia conflict |publisher=Reuters |date=8 August 2008}}</ref> ''[[Lenta.Ru]]'' stated that the reports on the entrance of the Russian tanks into South Ossetia was a cue to the investors to sell their assets.<ref>{{cite web |url=https://lenta.ru/articles/2008/08/11/stockwar/ |script-title=ru:Цена войны |publisher=Lenta.ru |date=11 August 2008 |language=ru}}</ref>
On 8 August 2008, [[Fitch Ratings]] lowered Georgia's sovereign debt ratings from BB− to B+, commenting that there were "increased downside risks to Georgia's sovereign creditworthiness". [[Standard and Poor's]] also downgraded ratings of Georgia.<ref>{{cite news |last=Lesova |first=Polya |title=Fitch lowers Georgia's debt ratings to B+ |publisher=[[MarketWatch]] |date=8 August 2008 |url=http://www.marketwatch.com/news/story/fitch-lowers-georgias-debt-ratings/story.aspx?guid={FA377F13-52F9-4AA2-A3C2-A57170314903}&dist=msr_2}}</ref>
[[Image:Georgian Pipelines.gif|thumb|Map of [[Baku-Supsa Pipeline|Baku-Supsa]] and [[Baku-Tbilisi-Ceyhan pipeline|Baku-Tbilisi-Ceyhan]] pipelines through Georgia]]
Although Georgia has no notable oil or gas reserves, its territory hosts part of the pipeline supplying Europe, and journalists expressed fear that the war may damage the [[Baku–Tbilisi–Ceyhan pipeline]] (BTC pipeline), 30% of which was owned by [[BP]].<ref>{{cite news |last=Pagnamenta |first=Robin |title=Analysis: energy pipeline that supplies West threatened by war Georgia conflict |publisher=[[The Times]] |date=8 August 2008 |url=http://www.timesonline.co.uk/tol/news/world/europe/article4484849.ece |archive-url=https://web.archive.org/web/20080812234347/http://www.timesonline.co.uk/tol/news/world/europe/article4484849.ece |archive-date=12 August 2008 |access-date=21 September 2008 |url-status=dead }}</ref> The BTC pipeline was closed before the conflict because of the terror attack allegedly by the [[Kurdistan Workers' Party|PKK]] in Turkey on 6 August 2008.<ref>{{cite news|url=http://www.ogj.com/index/article-display/336497/s-articles/s-oil-gas-journal/s-transportation/s-fire-damaged-btc-oil-line-could-have-5-week-shutdown.html |title=Fire-damaged BTC oil line could have 5-week shutdown |last=Watkins |first=Eric |publisher=Oil & Gas Journal |date=7 August 2008 |archiveurl=https://archive.today/20130131053835/http://www.ogj.com/articles/2008/08/fire-damaged-btc-oil-line-could-have-5-week-shutdown.html |archivedate=31 January 2013 |url-status=dead}}</ref> On 8 August 2008, [[light sweet crude]] for September delivery fell to $115.20 on the [[New York Mercantile Exchange]].<ref>{{cite news |url=http://money.cnn.com/2008/08/08/markets/oil/index.htm |title=Oil sinks to 3-month low |author=David Goldman |publisher=[[CNN]] |date=8 August 2008}}</ref> The war created further issues for BP.<ref>{{cite news |last=Watkins |first=Eric |title=BTC export alternatives on hold as Russia, Georgia clash |publisher=Oil & Gas Journal |date=8 August 2008 |url=http://www.ogj.com/articles/save_screen.cfm?ARTICLE_ID=336608 |archiveurl=https://archive.today/20120911013957/http://www.ogj.com/articles/2008/08/btc-export-alternatives-on-hold-as-russia-georgia-clash.html |archivedate=11 September 2012 |url-status=dead}}</ref>
Georgian government said that Russian warplanes destroyed the port of [[Poti]] on 8 August, which the Georgian government called "a key port for the transportation of energy sources" near to the [[Baku-Supsa pipeline]] and the Supsa oil terminal.<ref name=ft1>{{cite news |url=http://www.ft.com/cms/s/0/afb43a10-65a3-11dd-a352-0000779fd18c.html|title=UN row flares over Ossetia conflict |author1=Harvey Morris |author2=Roman Olearchyk |author3=Catherine Belton |publisher=[[Financial Times]] |date=9 August 2008 |archiveurl=https://archive.today/20120731125249/http://www.ft.com/cms/s/0/afb43a10-65a3-11dd-a352-0000779fd18c.html%23axzz22Civj7Pm |archivedate=31 July 2012 |url-status=live}}</ref> On 9 August 2008, Georgia said that Russian warplanes attacked the Baku-Tbilisi-Ceyhan pipeline.<ref>{{cite news|url=http://www.reuters.com/article/GCA-Russia/idUSL961816420080809|title=Russian jets targeted major oil pipeline: Georgia|publisher=Reuters|date=9 August 2008}}</ref>
On 12 August 2008, [[BP]] shut down the Baku-Supsa Pipeline and the [[South Caucasus Pipeline]] for the safety reasons.<ref name=upstream1>{{cite news | url=http://www.upstreamonline.com/live/article160951.ece | title=BP shuts in Georgia links | publisher=upstream | date=12 August 2008 | archiveurl=https://web.archive.org/web/20080820091926/http://www.upstreamonline.com/live/article160951.ece | archivedate=20 August 2008 | url-status=dead | access-date=21 September 2008 }}</ref> Gas supplies through the South Caucasus Pipeline were restarted on 14 August 2008.<ref name=upstream2>{{cite news | url=http://www.upstreamonline.com/live/article161060.ece | title=BP turns on Georgia gas taps | publisher=upstream | date=14 August 2008 | archiveurl=https://web.archive.org/web/20080822141741/http://www.upstreamonline.com/live/article161060.ece | archivedate=22 August 2008 | url-status=dead | access-date=21 September 2008 }}</ref>
When Russian president [[Dmitry Medvedev]] announced the cessation of hostilities on 12 August 2008, Russian markets and ruble stopped falling.<ref>{{cite news |url=http://news.yahoo.com/s/nm/20080812/ts_nm/georgia_ossetia_dc_94 |title=Russia orders halt to war, Georgia skeptical |author1=Oleg Shchedrov |author2=Margarita Antidze |publisher=Reuters |date=12 August 2008 |archiveurl=https://web.archive.org/web/20080819223456/http://news.yahoo.com/s/nm/20080812/ts_nm/georgia_ossetia_dc_94 |archivedate=19 August 2008 |url-status=dead |access-date=25 February 2024 }}</ref> After Medvedev's recognition of Abkhazia and South Ossetia on 26 August, Russia's indexes and ruble fell.<ref name="recognition">{{cite news|url=http://www.bloomberg.com/apps/news?pid=newsarchive&sid=afAvlgTbOoAg|title=Russia Recognizes Independence of Georgian Regions (Update4)|author1=Sebastian Alison |author2=Lyubov Pronina|publisher=[[Bloomberg L.P.|Bloomberg]]|date=26 August 2008 |archiveurl=https://archive.today/20140717174820/http://www.bloomberg.com/apps/news?pid=newsarchive&sid=afAvlgTbOoAg |archivedate=17 July 2014 |url-status=dead}}</ref><ref>{{cite web |url=https://lenta.ru/news/2008/08/26/rts2/ |script-title=ru:Признание независимости Абхазии и Осетии ускорило обвал фондового рынка |publisher=Lenta.ru |date=26 August 2008 |language=ru}}</ref>
Russian Finance Minister [[Alexei Kudrin]] stated on 17 August that $7 billion left Russia between 8 and 11 August.<ref>{{cite web |url=https://www.interfax.ru/business/27640 |script-title=ru:Отток капитала из РФ в период боевых действия в Южной Осетии составил $7 млрд |publisher=Interfax |date=17 August 2008 |language=ru}}</ref> By 20 August 2008, the market value of the Russian companies fell to less than $1 trillion.<ref>{{cite web |url=https://www.kommersant.ru/doc/1013663 |script-title=ru:Бегство капитализации |author=Nailya Asker-Zade |publisher=Kommersant |date=20 August 2008 |language=ru}}</ref>
On 9 September 2008, [[Assistant Secretary of State for European and Eurasian Affairs]] [[Daniel Fried]] said at a hearing of the [[United States House Committee on Foreign Affairs]], "The recent flight of billions of dollars from Russian equity markets is only an initial sign of the costs to Russia over time of its behavior." Fried warned that investors "generally seek a stable relationship with their economic partners and a predictable climate for their investments."<ref>{{cite web |url=https://2001-2009.state.gov/p/eur/rls/rm/109363.htm |title=U.S.-Russia Relations in the Aftermath of the Georgia Crisis |publisher=U.S. Department of State |date=9 September 2008}}</ref> Russian journalist [[Yulia Latynina]] argued that the investors were reacting to the hearings at the [[United States Congress]] where [[Eric S. Edelman]] and [[Daniel Fried]] stated that Russia was responsible for the August war.<ref>{{cite web |url=http://www.ej.ru/?a=note&id=8393 |script-title=ru:О ПАДЕНИИ РЫНКА И СЛУШАНИЯХ В КОНГРЕССЕ |publisher=EJ |author=Yulia Latynina |date=12 September 2008|language=ru}}</ref>
Head of the [[Moscow]] branch of [[Barclays]] Capital said that the war with Georgia was the tipping point for the investors.<ref>{{cite web |url=http://www.ft.com/cms/s/0/34b23094-7ea6-11dd-b1af-000077b07658.html |title=Moscow facing lending crisis |author=Catherine Belton |publisher=Financial Times |date=9 September 2008}}</ref><ref>{{cite web |url=https://royaldutchshellplc.com/2008/09/10/exodus-of-capital-hits-russia-lending/ |title=Moscow facing lending crisis |author=Catherine Belton |publisher=Royal Dutch Shell Plc |date=10 September 2008}}</ref>
[[Echo of Moscow]] reported on 10 September 2008 that experts were assessing the official figure of Russian market loss of $5 billion as artificially lowered.<ref>{{cite web |url=http://echo.msk.ru/news/539690-echo.html |script-title=ru:Российский рынок акций открылся сегодня новым обвалом |publisher=Echo of Moscow |date=10 September 2008 |language=ru |archiveurl=https://web.archive.org/web/20080913030449/http://echo.msk.ru/news/539690-echo.html |archivedate=13 September 2008 |url-status=dead}}</ref> Russian president Medvedev accused the [[United States]] of causing the [[2007–2008 financial crisis]].<ref>{{cite web |url=https://lenta.ru/news/2008/09/10/podstava/ |script-title=ru:Медведев упрекнул США в "подставе" на финансовом рынке |publisher=Lenta.ru |date=10 September 2008 |language=ru}}</ref> The Russian stock market was officially recognised as the worst performing stock market in the world on 10 September 2008. The [[BBC]] reported that the Russian stocks lost more than $300 billion valuation since the beginning of the war and one Russian expert linked the capital flight to the geopolitical tension between Russia and the West.<ref>{{cite web |url=http://news.bbc.co.uk/hi/russian/business/newsid_7609000/7609010.stm |script-title=ru:Фондовый рынок России стал самым худшим в мире |publisher=BBC Russian |date=10 September 2008 |language=ru}}</ref>
On 12 September 2008, Russian president Medvedev attributed only 25% of the stock market fall to the war with Georgia.<ref>{{cite web |url=https://www.reuters.com/article/russia-medvedev-property-idUSLC66328520080912 |title=Russia wants "normal, good" investment climate-Medvedev |author=Janet McBride |publisher=Reuters |date=12 September 2008}}</ref><ref>{{cite web |url=https://www.wsj.com/articles/SB122168385789049131 |title=Run on Russia |publisher=Wall Street Journal |date=18 September 2008}}</ref> Medvedev contradicted [[Vladimir Putin]]'s earlier statement that the Georgian war was not the reason for the fall of the market.<ref>{{cite web |url=http://www.ft.com/cms/s/0/5b53f21a-80ee-11dd-82dd-000077b07658.html |title=Medvedev and Putin at odds on market fall |author=Stefan Wagstyl |publisher=Financial Times |date=13 September 2008}}</ref>
On 17 September 2008, [[Under Secretary of State for Political Affairs]] [[William J. Burns (diplomat)|William J. Burns]] stated before the hearing of the [[United States Senate Committee on Foreign Relations]]:
{{Quotation|"Since August 7, investor confidence has plummeted; at least in part because of the Georgia crisis, Russian financial markets have lost nearly a third of their value, with losses in market capitalization of hundreds of billions of dollars. Capital is fleeing Russia, with $7 billion leaving the country on August 8 alone, according to Russian Finance Minister Kudrin. The ruble has depreciated by nearly 10 percent since the Georgia crisis began. The Russian Central Bank has spent billions of dollars of its reserves to try to halt the slide of the ruble."<ref>{{cite web |url=https://www.govinfo.gov/content/pkg/CHRG-110shrg46828/html/CHRG-110shrg46828.htm |title=RUSSIA'S AGGRESSION AGAINST GEORGIA: CONSEQUENCES AND RESPONSES |publisher=U.S. GOVERNMENT PRINTING OFFICE |date=17 September 2008}}</ref><ref>{{cite web |url=https://www.reuters.com/article/GCA-Russia/idUSN1752725820080917 |title=Russian markets paying price for Georgia action: U.S. |author=Susan Cornwell |publisher=Reuters |date=17 September 2008}}</ref>}}
The ''[[Wall Street Journal]]'' wrote: "The second blow [to the Russian markets] was the war in the Caucasus: Russia crushed the Georgian army, but then Russia itself was crushed by the world economy."<ref>{{cite web |url=https://www.delfi.lt/ru/abroad/global/zapadnye-smi-vozlozhili-otvetstvennost-za-finansovyj-krizis-na-kreml-i-putina.d?id=18581930 |script-title=ru:Западные СМИ возложили ответственность за финансовый кризис на Кремль и Путина |publisher=NEWSru.com |date=18 September 2008 |language=ru}}</ref> [[Anders Åslund]] commented on the Russian financial crisis that "Putin has rendered his poor country a prime victim" of his premeditated invasion of Georgia.<ref>{{cite web |url=https://www.project-syndicate.org/commentary/russia-s-coming-financial-crash |title=Russia's Coming Financial Crash |author=Anders Åslund |publisher=Project Syndicate |date=18 September 2008 |archiveurl=https://web.archive.org/web/20121020133110/https://www.project-syndicate.org/commentary/russia-s-coming-financial-crash |archivedate=20 October 2012 |url-status=dead}}</ref>
With regard to the financial market reaction to the Russo-Georgian War, [[Agence France-Presse]] reported on 19 September 2008 that unidentified analysts believed that Russian stock exchange decline in August and September 2008, were attributed to "a mix of falling energy prices, global market turmoil and political issues including worries over the war with Georgia."<ref>{{cite web |url=http://afp.google.com/article/ALeqM5j8R4_3j96oTVQzSlJlqtZsZD9OPA |title=Russian stock market still shut after plunge: market official |publisher=AFP |date=18 September 2008 |archiveurl=https://web.archive.org/web/20080919230300/http://afp.google.com/article/ALeqM5j8R4_3j96oTVQzSlJlqtZsZD9OPA |archivedate=19 September 2008 |url-status=dead |access-date=21 September 2008 }}</ref>
In late September, the [[Kremlin]] issued $130 billion aid to help recover the stock market. The ''[[Financial Times]]'' argued that Russian invasion of Georgia damaged "the understanding that if tycoons played by Kremlin rules they would prosper".<ref>{{cite web |url=https://www.ft.com/content/9d1cffd0-8624-11dd-959e-0000779fd18c |title=Russian lessons |publisher=Financial Times |date=20 September 2008}}</ref>
On 27 September 2008, US Vice-Presidential candidate [[Joe Biden]] said during his meeting with Georgian president [[Mikheil Saakashvili]] that Russia was paying price for her actions in Georgia and Russian stock markets lost around $750 billion.<ref>{{cite web |url=https://www.newsru.com/world/27sep2008/saa.html |script-title=ru:Грузия не хочет вставлять клин между Россией и мировым сообществом, заявил Михаил Саакашвили |publisher=NEWSru.com |date=27 September 2008 |language=ru}}</ref><ref>{{cite web |url=http://www.echo.msk.ru/news/543197-echo.html |script-title=ru:С жесткой критикой в адрес России выступил кандидат в вице-президенты США Джозеф Байден |publisher=Echo of Moscow |date=27 September 2008 |language=ru |archiveurl=https://web.archive.org/web/20081001194814/http://www.echo.msk.ru/news/543197-echo.html |archivedate=1 October 2008 |url-status=dead}}</ref>
British [[Secretary of State for Foreign and Commonwealth Affairs|Foreign Secretary]] [[David Miliband]] suggested that Russia's posture could be changed by the plummeting of Russian stocks, "there is leverage on Russia, in the form of international markets."<ref>{{cite web |url=http://news.bbc.co.uk/2/hi/europe/7639612.stm |title=West looks to future with Russia relations |author=Bridget Kendall |publisher=BBC |date=27 September 2008}}</ref>
Russian billionaire [[Alexander Lebedev]] opined by late September 2008 that the war in Georgia was responsible for the 40% drop in the Russian financial market.<ref>{{cite web |url=https://www.nytimes.com/2008/09/28/world/asia/28lebedev.html |title=A Tycoon Tweaks Putin, and Gets Away With It |author=Ellen Barry |publisher=The New York Times |date=27 September 2008}}</ref>
Russian economist [[Andrey Illarionov]] noted the correlation between the escalation of the aggressive rhetoric of the Russian officials and the sharp drops of the Russian financial markets in August-September 2008.<ref>{{cite web |url=https://www.gazeta.ru/comments/2008/10/01_x_2846502.shtml |script-title=ru:Природа российского кризиса |author=Andrey Illarionov |publisher=gazeta.ru |date=2 October 2008 |language=ru}}</ref>
Former [[Prime Minister of Estonia]] [[Mart Laar]] stated in October 2008 that it was "miracle" that the [[Economy of Georgia (country)|Economy of Georgia]] survived the war.<ref>{{cite web |url=https://www.newsru.com/world/14oct2008/laar.html |script-title=ru:Экс-премьер Эстонии Март Лаар об экономике послевоенной Грузии: "Чудо, что она не рухнула" |publisher=NEWSru.com |date=14 October 2008 |language=ru}}</ref> Israeli newspaper ''[[Yedioth Ahronoth]]'' stated in November 2008 that it was the economy of defeated Georgia that was prospering, not the economy of winning opponent.<ref>{{cite web |url=http://izrus.co.il/dvuhstoronka/article/2008-11-20/2706.html |script-title=ru:Израильтяне восстанавливают Грузию, которая уже "сильнее России" |publisher=izrus |date=20 November 2008 |language=ru |archiveurl=https://web.archive.org/web/20090123091452/http://izrus.co.il/dvuhstoronka/article/2008-11-20/2706.html |archivedate=23 January 2009 |url-status=dead}}</ref>
Russian newspaper ''[[Vedomosti]]'' stated in late October 2008 that no investor was fleeing Russia before the war in Georgia.<ref>{{cite web |url=http://www.vedomosti.ru/newspaper/article.shtml?2008/10/21/165445 |script-title=ru:От редакции: Рубль и реальность |publisher=Vedomosti |date=21 October 2008 |language=ru |archiveurl=https://web.archive.org/web/20081021224429/http://www.vedomosti.ru/newspaper/article.shtml?2008/10/21/165445 |archivedate=21 October 2008 |url-status=dead}}</ref> Russian journalist [[Yulia Latynina]] commented on the Russian stock collapse that the "Russo-Georgian war can be considered the largest [[Insider trading|insider deal]] undertaken so far in the history of mankind".<ref>{{cite web |url=https://www.gazeta.ru/column/latynina/2864468.shtml |script-title=ru:Russia's meltdown |publisher=gazeta.ru |date=24 October 2008 |language=ru}}</ref>
[[Bloomberg L.P.]] agency stated in late October 2008 that the Russian stocks had become the cheapest stocks in the world.<ref>{{cite web |url=https://lenta.ru/news/2008/10/27/cheap/ |script-title=ru:Акции российских компаний названы самыми дешевыми в мире |publisher=Lenta.ru |date=27 October 2008 |language=ru}}</ref> [[Stratfor]] stated that "nearly $63 billion in foreign investment was pulled out of Russia immediately following the August intervention in Georgia."<ref>{{cite web |url=https://worldview.stratfor.com/article/financial-crisis-russia |title=The Financial Crisis in Russia |publisher=Stratfor |date=28 October 2008}}</ref>
[[Mayor of Moscow]] [[Yury Luzhkov]] claimed in November 2008 that excessive American military spending in Georgia, Ukraine and the Baltic countries was responsible for the [[2007–2008 financial crisis]].<ref>{{cite web |url=https://ria.ru/20081111/154847776.html |script-title=ru:Лужков видит причины финкризиса в "раздутом" военном бюджете США |publisher=RIA Novosti |date=11 November 2008 |language=ru}}</ref> [[James Rubin]] noted: "Even before the financial crisis struck last month, Russia's market was collapsing as a result of the Georgian war, making a mockery of Putin's boast that [[Moscow]] would soon be the world's financial center."<ref>{{cite web |url=https://newrepublic.com/article/63409/red-herring |title=Red Herring |author=James P. Rubin |publisher=The New Republic |date=19 November 2008}}</ref> Russian president Medvedev announced in March 2009 that Russia was no longer considering the establishment of the world financial center in Moscow due to the financial crisis.<ref>{{cite web |url=https://graniru.org/Politics/Russia/m.148374.html |script-title=ru:Медведев: Мировой финансовый центр в Москве больше не актуален |publisher=Grani.ru |date=7 March 2009 |language=ru}}</ref>
The financial crisis in Russia caused the separatist sentiments and the emergence of the suggestions to return to the budget relations of the times of the [[Parade of sovereignties]] between Moscow and the regions. [[Head of Tatarstan]] [[Mintimer Shaimiev]] supported the idea of strengthening of [[federalism]] in Russia and the revision of the relations between the federal center and the regions. [[Head of the Republic of Bashkortostan]] [[Murtaza Rakhimov]] said that the restoration of the elements of federalism would be a "worthy response" to the financial crisis.<ref>{{cite web |url=https://ura.news/articles/1027135804 |script-title=ru:В России резко запахло сепаратизмом. Кремль создает свой «спецназ» |publisher=URA.RU |date=13 November 2008 |language=ru}}</ref> Russian journalist [[Mikhail Leontyev]] stated that the [[World War III]] was the only way out of the financial crisis and did not rule out that it could begin either with the [[Russia–Ukraine relations|escalation between Russia and Ukraine]] or the renewed conflict with Georgia.<ref>{{cite web |url=http://www.dpmoney.ru/Default2.aspx?ref=topread&ArticleID=105de3fe-16f4-430b-ac6c-1d87038c8b97 |script-title=ru:Леонтьев: единственный выход из кризиса - глобальная война |publisher=dpmoney.ru |date=13 November 2008 |language=ru |archiveurl=https://web.archive.org/web/20081210021602/http://www.dpmoney.ru/Default2.aspx?ref=topread&ArticleID=105de3fe-16f4-430b-ac6c-1d87038c8b97 |archivedate=10 December 2008 |url-status=dead}}</ref>
The [[International Reserves of the Russian Federation|Russian gold and foreign currency reserves]] had been reduced from $597 billion on 8 August 2008 to $437 billion as of 5 December 2008.<ref>{{cite web |url=http://news.bbc.co.uk/hi/russian/business/newsid_7788000/7788722.stm |script-title=ru:Курс евро к рублю дошел до исторического максимума |author=Kirill Sukhotsky |publisher=BBC Russian |date=17 December 2008 |language=ru}}</ref> Russia's credit rating was downgraded in December 2008 for the first time since the [[1998 Russian financial crisis]].<ref>{{cite web |url=https://www.csmonitor.com/World/2008/1210/p01s06-wogn.html |title=Russians trudge ahead as economy tanks once again |author=Fred Weir |publisher=The Christian Science Monitor |date=10 December 2008}}</ref> The Russian authorities banned the word "crisis" for describing the situation in Russia in the state-administered media.<ref>{{cite web |url=http://news.yahoo.com/s/nm/20081216/wl_nm/us_financial_russia_media |title="Crisis" a word best spoken quietly in Russia |publisher=Reuters |date=16 December 2008 |archiveurl=https://web.archive.org/web/20081216021057/http://news.yahoo.com/s/nm/20081216/wl_nm/us_financial_russia_media |archivedate=16 December 2008 |url-status=dead}}</ref> Russian expert noted that the Kremlin would increase the verbal attacks on Georgia, Ukraine and the United States to distract the Russian population from the economic problems.<ref>{{cite web |url=http://www.forbes.com/2008/12/24/russia-ruble-unrest-markets-equity-cx_po_1224markets06.html |title=Russia Frets Over Social Unrest |author=Parmy Olson |publisher=Forbes |date=24 December 2008 |archiveurl=https://web.archive.org/web/20090202135113/http://www.forbes.com/2008/12/24/russia-ruble-unrest-markets-equity-cx_po_1224markets06.html |archivedate=2 February 2009 |url-status=dead}}</ref>
[[Paddy Ashdown]] wrote that economic crisis triggered by the war in Georgia would cause Russia to improve relations with the [[European Union]].<ref>{{cite web |url=https://www.newsru.com/world/18dec2008/es_russia.html |script-title=ru:Европейский эксперт: Путин - судьба России, и это вина Европы |publisher=NEWSru.com |date=18 December 2008 |language=ru}}</ref>
The [[Central Bank of Russia]] used $74 billion in December 2008 to halt the fall of ruble which had started after the Russian invasion of Georgia in August 2008.<ref>{{cite web |url=https://www.ft.com/content/7274d448-e339-11dd-a5cf-0000779fd2ac |title=Shift to dollar sees rouble plumb new low |author=Catherine Belton |publisher=Financial Times |date=15 January 2009}}</ref><ref>{{cite web |url=https://www.euro2day.gr/ftcom_en/article-ft-en/436745/shift-to-dollar-sees-rouble-plumb-new-low.html |title=Shift to dollar sees rouble plumb new low |author=Catherine Belton |publisher=EURO2day |date=15 January 2009}}</ref> The Central Bank of Russia announced in January 2009 that third quarter of 2008 saw a net capital outflow of $17.4 billion, while $130.5 billion left Russia in the fourth quarter.<ref>{{cite web |url=https://ria.ru/20090113/159121397.html |script-title=ru:Чистый отток капитала из РФ в IV квартале составил $130,5 млрд - ЦБ |publisher=RIA Novosti |date=13 January 2009 |language=ru}}</ref> As of 30 January 2009, the Central Bank of Russia had disbursed $211 billion since August 2008.<ref>{{cite web |url=http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aN2J7GEHTNrM&refer=home |title=Investors Say Nyet to Putin’s Ruble After Davos Talk (Update1) |author=Alex Nicholson |publisher=Bloomberg |date=30 January 2009 |archiveurl=https://web.archive.org/web/20121107095105/http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aN2J7GEHTNrM&refer=home |archivedate=7 November 2012 |url-status=dead}}</ref>
[[Petrozavodsk]] Shipbuilding Plant announced in January 2009 that the [[2007–2008 financial crisis]] compelled it to consider selling of warship even to Georgia.<ref>{{cite web |url=https://www.newsru.com/russia/15jan2009/vpk.html |script-title=ru:Кризис толкает ВПК РФ продавать военные корабли даже Грузии |publisher=NEWSru.com |date=15 January 2009 |language=ru}}</ref> On 3 March 2009, ''[[Kommersant]]'' newspaper reported that a large part of promised Russian financial aid had not yet arrived in South Ossetia due to dispute between South Ossetian and Russian authorities on the control mechanism of spending. Russian expert Mikhail Aleksandrov explained the wish of Russia to control South Ossetian spending as caused by the financial crisis and that the Russian government lacked funds for Russia's own regions.<ref>{{cite web |url=http://news.bbc.co.uk/hi/russian/russia/newsid_7920000/7920287.stm |script-title=ru:Южная Осетия для России - чемодан без ручки |publisher=BBC Russian |date=3 March 2009 |language=ru}}</ref> ''Kommersant'' reported on 16 March 2009 that the government-affiliated workers in Tskhinvali received their January-February wages only in March and the authorities explained this delay as caused by the financial crisis in Russia.<ref>{{cite web |url=https://www.kommersant.ru/doc/1138793 |script-title=ru:Южная Осетия не восстанавливается на достигнутом |publisher=Kommersant |date=16 March 2009 |language=ru}}</ref> In late March 2009, [[Ministry of Regional Development (Russia)|Russian minister of regional development]] [[Viktor Basargin]] stated that by the year's end, the financial crisis could cause the number of budget donor regions to drop to only two: Moscow and [[Saint Petersburg]].<ref>{{cite web |url=https://www.infox.ru/news/27/12849-minregion-kormit-rossiu-budut-moskva-i-sankt-peterburg? |script-title=ru:Минрегион: кормить Россию будут Москва и Санкт-Петербург |publisher=infox.ru |date=27 March 2009 |language=ru}}</ref>
== See also ==
* [[Great Recession in Russia]]
==References==
{{Reflist}}
{{DEFAULTSORT:Financial market reaction to the Russia-Georgia war}}
[[Category:Russo-Georgian War]]