Many remember the time when there was a default in Russia

Many today remember the time when there was a default in Russia, since this period was marked by a series of unpleasant events that affected every resident of our country. In that period (summer 1998), savings in rubles almost instantly depreciated, a certain period did not pay pensions and salaries, many enterprises and banks went bankrupt and closed.

The default in Russia in 1998 was due to a number of external factors. In particular, in the world markets in the segment of Southeast Asia in 1997, a crisis erupted. During this period, the currency of Thailand was attacked by international speculators, as a result of which the Thai baht fell by a factor of two compared to the dollar, and the stock market - by 75%. This state had a large number of obligations with insufficient volumes of GDP. Further severe shocks occurred in the economies of Malaysia, Indonesia and South Korea. This, in turn, caused the outflow of capital from developing countries (to which the Russian Federation included) and the fall in commodity prices.

When there was a default in Russia, there was an unprecedented preliminary price drop in the oil market. It is known that in 1997, one barrel cost about $ 19, while in May, a couple of months before the default, the price dropped to $ 8. The country had large international obligations and small gold and foreign exchange reserves. Due to insufficient funds, the government of the Russian Federation was forced to abandon its obligations under bonds, borrowings for which were built on a pyramid scheme (GKO, OFZ) and to default on August 17.

When there was a default in Russia, there were catastrophic phenomena in the financial and economic system. Then they stopped operations with government securities, the stock market collapsed, banks stopped issuing deposits. After the resumption of operations with GKOs (government short-term liabilities), they were placed at a yield of more than 100%.

What were the consequences of the financial crisis in Russia? The default reduced the gross domestic product of our state to the level of Belgium, we became the largest debtor in the world (more than two hundred billion dollars), to the west, about 1.2 trillion dollars of Russian money (about eight of the country's budgets at that time) was withdrawn. The consequences of the crisis were overcome for a long six years.

The mistakes made when there was a default in Russia allowed to gain invaluable experience for further development. A definite push was given to the domestic industry, since imported goods became very expensive for the population due to the growth of the dollar rate. On the contrary, Russian goods became easier to export, because their value fell significantly due to the cheap ruble.

Also, certain conclusions were made regarding the financial policy of the state. In particular, Russia's external debt as of the end of 2013 was $ 152 billion, of which external bond loans account for about $ 40 billion, and the bulk is accounted for by the debts of the USSR. The gold and foreign exchange reserves of the country (unlike in 1998) are quite large, amounting to $ 700 billion, which is a "safety cushion". Such measures allow the Russian economy to remain afloat during the current global economic crisis.