Inflation Soars In Russia, International Sanctions Making Life Difficult

Russia’s invasion of Ukraine will have its repercussions and people residing in the country are feeling it. Inflation has risen and figures clearly show that following the international sanctions meted on the country.

Commodities such as onions and sugar clearly show the rise in prices. The price of sugar, something used in the preservation of food and making of liquor has jumped to 14% over the past week, BBC.com reported.

The price of onions is the second biggest riser over the week, rising by 13.7% nationwide and 40.4% in other areas.

Meanwhile, nappies were 4.4% more expensive. Prices for black tea rose 4% and toilet paper increased by 3%.

With the rouble continuing to fall, inflation is expected to continue rising. The value of Russia’s currency has dropped to 22% for the year and such has resulted in the higher cost of importing goods.

These were the results after Russia resumed trading on Thursday after a month-long hiatus. The benchmark Moex index was up by around 5.6% at midday in Moscow.

According to analysts, the government plans to buy billions of dollars worth of Russian shares to try and support the market which has dived last month since the invasion of Ukraine began.

It should be noted that bans on trade with foreigners and short-selling remain in place.

"The biggest culprit is imported inflation," Mr. Innes told the BBC. "Anything Russia imports is exponentially (pricier) due to the weaker rouble."

Russia is feeling the effects of the sanctions imposed by the U.S. and the UK as well as other European Union. Several Russian banks have been cut from financial markets in the West, a development that could mean worse scenarios.

The U.S., UK and the European Union have also prohibited dealings with Russia's central bank, state-owned investment funds and the finance ministry.

The Bank of Russia more than doubled its interest rate to 20% in March, an attempt to stop its currency from sliding further.