It’s official: after what’s been years of brinksmanship, Russia’s invaded Ukraine. And now Russia’s richest men are losing money fast thanks to the invasion.
As CNN reports, Russian stocks have suffered an astronomical crash and the Russian ruble has hit a record low against the US dollar in response to Russian President Vladimir Putin’s brazen attack on Ukraine. Russian banks and oil companies – the bedrock of the Russian economy – have been the worst hit, with Sberbank (SBRCY), Russia’s largest lender, losing over 43% of its value overnight.
At 8:05am local time on Thursday, Moscow Exchange (Russia’s largest stock exchange) announced they were suspending trading on all of its markets until further notice. Only an hour later, they reversed their decision. While many shares have recovered, the market is still down over 33%.
Of course, this has wiped billions of dollars worth off the bottom line of Russia’s notoriously powerful oligarchs… But some might argue that this is all a part of Putin’s plan.
Putin, himself an insanely wealthy man, has an uneasy relationship with the exceptionally powerful and largely unaccountable oligarchs that control most of the Russian economy. While he’s been adept at installing allies in positions of power within the Russian public and private sectors, he constantly treads a fine balance.
Invading Ukraine might help Putin achieve the geopolitical aspirations he’s nurtured long before the 2014 annexation of Crimea, tanking the stock market also serves his interests, to a degree. It weakens the oligarchs’ bottom lines and reminds them who’s really in charge in Russia.
It’s hard to feel much sympathy for these billionaires, though. We’re also yet to see the real impact of the economic sanctions the West is levying on Russia in retaliation… Watch this space.