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How Did Crimean Crisis Affect Interest Rate

Many crises around the world have a big impact on countries that may not even realize it. Whenever there is a global conflict that spans the world and is reported daily on the news it will have a negative impact on the global economy particularly in the form of impacting interest rates. When a country begins to fail investors no longer want to invest there. Those who are already there try and pull out while new investments never come. Foreign governments get involved and soon the international community turns to sanctions. While sanctions are an effective political tool they can also harm investors and in turn alter the interest rate around the world. With fluctuating currencies and currency exchanges it is easy to see how the crisis in Crimea could have affected the internet rate around the world.

It is important to recognize that any global issue will reap the same concerns internationally and the sanctions imposed by other nations will certainly have an impact on the behaviour of the countries involved. This impact may show itself in the form of increased debt or failure to repay investors. It can result in strategic moves or harm investors who are placed on a sanctions list because of their country of origin.

With Russia there were sanctions placed because of the interference in Crimea. The western nations put individuals on a sanctions list in an effort to counter the leverage that Russia was placing over Europe. It was able to do this because it owned thirty percent of natural gas exports to Europe. Russia used this to influence neighboring countries--or more appropriately to coerce neighboring countries. Geopolitics and the global market are always important factors to weigh when you consider international interests rates. Bans and sanctions on other economies will punish the country for what they do. They will cost those countries a great deal of profit and cause interest rates to fluctuate but at the same time others will benefit from this and be able to swoop in and cover the gap left by sanctions.

Overall it is important to note that the Crimean crisis resulted in a great deal of economic shifts and sanctions in response to those shifts. This caused profits to fall and to rise in neighboring countries. It caused investors to remain apprehensive and as a result it affected the interest rate around the world.

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