Trading on Russia's two main stock exchanges has been suspended until Tuesday in an effort to halt the steep declines. But the Russian government says it can cope with the situation and President Medvedev says Russia can escape the global financial crisis.
Russia's been struggling to become a part of the global economy and now it has. And the Russian stock markets have been reeling from it. Friday saw the exchanges plunge by over ten per cent after a production cut from OPEC failed to reassure the markets that crude prices would stabilise. However, as President Medvedev said through his video-blog on the official Kremlin's site, Russia still can – and is actually obliged to – avoid ‘the grave flow’ of the global financial crisis. “If that had happened five or seven years ago, the crisis would probably have had less impact on Russia. Today, the situation is different: we are a country with an open economy. On the one hand, it gives us enormous advantages; on the other, it forces us to react and tackle the problems that all other major powers are facing,” he said. Analysts say the world is now entering a new era of economic recession and the only question is how long the downturn will be. While OPEC hopes other oil-producing countries will follow its lead in cutting production, Russia may instead increase its production. Experts say Russia's been spoiled with unnaturally high prices. “I would say this is more of a psychological factor because people really got used to the extremely high level of oil prices. Countries that produce oil should now adjust themselves back to the normal way of living,” says Vyacheslav Mishchenko, energy consultant for Pace Global Services. Meanwhile, the government promises it is prepared for a long cold winter in the red zone. Related links OPEC pares production as crude prices slump Carnage: Global stocks crash as tsunami sized sell off looms in New York Retailers brace for sales slowdown