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In February 2022, the Russian economy fell into severe decline as a result of the 2022 Russian invasion of Ukraine and subsequent economic sanctions and other causes.

In Russia, the economic sanctions had an immediate effect. The Russian stock market crashed, falling 39%, as measured by the RTS Index, on the first day of the invasion with similar falls in the following days. The Ruble fell to record lows as Russians rushed to exchange money. Stock exchanges in Moscow and St Petersburg were suspended. The Central Bank of Russia announced its first market interventions since the 2014 annexation of Crimea to stabilise the market. It also raised interest rates to 20% and banned foreigners from selling local securities. The sanctions put Russia's sovereign wealth fund at risk of disappearing.

In Ukraine, the National Bank suspended currency markets, announcing that it would fix the official exchange rate. The central bank also limited cash withdrawals to 100,000 hryvnia per day and prohibited withdrawal in foreign currencies by members of the general public. The PFTS Stock Exchange stated on 24 February that trading was suspended due to the emergency events. As a result of the invasion, Brent oil prices rose above $100 a barrel for the first time since 2014.

Wheat prices surged to their highest prices since 2008 in response to the attack. Ukraine is the fourth-largest exporter of corn and wheat and the world's largest exporter of sunflower oil, with Russia and Ukraine together exporting 29% of the world's wheat supply and 75% of world sunflower oil exports. The benchmark Chicago Board of Trade March wheat futures contract reached its highest price since 2012 on 25 February, with the prices of corn and soybean also spiking. The American Bakers Association president warned that the price of anything made with grain would begin rising as all the grain markets are interrelated. The chief agricultural economist for Wells Fargo stated that Ukraine will likely be severely limited in their ability to plant crops in spring 2022 and lose an agricultural year, while an embargo on Russian crops would create more inflation of food prices. Recovering crop production capabilities may take years even after fighting has stopped. Surging wheat prices resulting from the conflict have strained countries such as Egypt, which are highly dependent upon Russian and Ukrainian wheat exports, and have provoked fears of social unrest. On 24 February, China announced that it would drop all restrictions on Russian wheat, in what the South China Morning Post called a potential "lifeline" for the Russian economy.

Kristalina Georgieva, the managing director of the International Monetary Fund, warned that the conflict poses a substantial economic risk for the region and internationally and added that the Fund could help other countries impacted by the conflict, complementary to a $2.2 billion loan package being prepared to assist Ukraine. David Malpass, the president of the World Bank Group, said that the conflict would have far-reaching economic and social effects and reported that the bank was preparing options for significant economic and fiscal support to Ukrainians and the region.

On 27 February, BP, one of the world's seven largest oil and gas companies and the single largest foreign investor in Russia, announced it was divesting from Rosneft. The Rosneft interest comprises about half of BP's oil and gas reserves and a third of its production. The divestment may cost the company up to $25 billion and analysts noted that it was unlikely that BP would be able to recover a fraction of this cost. The same day, the Government Pension Fund of Norway, the world's largest sovereign wealth fund, announced that it would divest itself from its Russian assets. The fund owned about 25 billion Norwegian krone ($2.83 billion) in Russian company shares and government bonds.

UPS and FedEx announced that they will no longer be working in Russia.

References

1. Thompson, Mark. "Russian stocks crash 33% and ruble plunges to record low". CNN. Archived from the original on 24 February 2022. Retrieved 25 February 2022.
2. "Moscow Exchange resumes trading on its markets at 10:00am". Moscow Exchange. 24 February 2022. Archived from the original on 24 February 2022. Retrieved 24 February 2022.
3. Mudgill, Amit (24 February 2022). "Russian stocks nosedive 20% as trading resumes on Moscow Exchange". The Economic Times. Archived from the original on 24 February 2022. Retrieved 24 February 2022.
4. "Moscow Exchange has suspended trading on all of its markets until further notice". Moscow Exchange. 24 February 2022. Archived from the original on 24 February 2022. Retrieved 24 February 2022.
5. Teterevleva, Anastasia; Rodionov, Maxim (24 February 2022). "Moscow Exchange suspends trading on all markets". Reuters. Archived from the original on 24 February 2022. Retrieved 24 February 2022.
6. "Moscow, Saint Petersburg Exchanges Say Trading Suspended". Agence France-Presse. Barron's. 24 February 2022. Archived from the original on 24 February 2022. Retrieved 24 February 2022.
7. "Ukraine war: sanctions-hit Russian rouble crashes as Zelenskiy speaks of 'crucial' 24 hours". the Guardian. 28 February 2022.
8. "Russians queue for cash as West targets banks over Ukraine". Reuters. 27 February 2022.
9. Ostroff, Caitlin (24 February 2022). "Ukraine Central Bank Halts Currency Market, Limits Cash Withdrawals". Wall Street Journal. Archived from the original on 24 February 2022. Retrieved 24 February 2022.
10. Lockett, Hudson (24 February 2022). "Oil rises above $100 a barrel for the first time since 2014". The Financial Times. Archived from the original on 24 February 2022. Retrieved 24 February 2022.
11. Swanson, Anna. "Ukraine Invasion Threatens Global Wheat Supply". The New York Times. Archived from the original on 24 February 2022. Retrieved 25 February 2022.
12. "Russia's invasion of Ukraine will likely ratchet American food prices even higher, experts say". The Washington Post. 26 February 2022. Archived from the original on 27 February 2022. Retrieved 26 February 2022.
13. "How tensions in Ukraine could rile Egypt". The Economist. Archived from the original on 24 February 2022. Retrieved 25 February 2022.
14. Tang, Frank (24 February 2022). "China lifts all wheat-import restrictions on Russia amid Ukraine crisis". South China Morning Post. Retrieved 26 February 2022.
15. "IMF, World Bank Chiefs Warn Of Global Impacts From Ukraine War". Archived from the original on 24 February 2022. Retrieved 24 February 2022.
16. "BP to offload stake in Rosneft amid Ukraine conflict". BBC News. 27 February 2022. Archived from the original on 27 February 2022. Retrieved 27 February 2022.
17. "BP quits Russia in up to $25 billion hit after Ukraine invasion". Reuters. 27 February 2022. Retrieved 28 February 2022.
18. "Norway says its sovereign fund will divest from Russia". Reuters. 27 February 2022. Retrieved 28 February 2022.
19. Reuters (2022-02-27). "UPS and FedEx halting shipments to Russia and Ukraine". Reuters. Retrieved 2022-02-28. {{cite news}}: |last= has generic name (help)

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