Russia and The Slide of the Ruble & Purpose of SDRs Today - 275 Words

Russia and The Slide of the Ruble & Purpose of SDRs Today (Essay Sample) Content: Name:Institution:Course:Date: 1 Russia and the Slide of the RubleThe sanctions on Russia by the European Union have dealt with a bigger blow on its ruble. The sanctions are as a result of Russia sending its troops to Ukraine even with the objections from other super power nations. The sanctions will force Russia to hike the prices of the goods it imports and this might drive away the nations that import their goods into Russia. The decline in the value of the ruble drives away investors as the nationà ¢Ã¢â€š ¬s economy is rapidly declining while the consumersà ¢Ã¢â€š ¬ sentiments get depressed (Black, pg. 59). 2 The Purpose of the SDRà ¢Ã¢â€š ¬s TodayTodayà ¢Ã¢â€š ¬s role of SDR is to relieve the IMF of its duties of discharging its monetary services to its members. In addition, the members of the IMF can as well sell the SDRs so as to fine-tune their reservesà ¢Ã¢â€š ¬ composition. Moreover, the SDRs enable the members of the IMF to freely exchange currencies wi thout restrictions with the intermediary of the IMF (Wilkie, pg. 86). As such, I do not find any valid reason why China, Brazil India and Russia would want to form their own replica of IMF. 3 Currencies I would Invest in the EU CountriesI would love to invest in Germany since its economy is strong and it is ranked second in Europe. The enlisted list below shows reasons why I choose Germany as my nation of investment. * Germanyà ¢Ã¢â€š ¬s currency is Euro and it is easily accepted in other neighboring nations like Denmark and Poland. * Hotels and gift shops in Germany accept the U.S dollar from the U.S visiting tourists without restrictions and thus it is easy to invest in the hotel business in Germany. 4 Gold StandardAdvantagesThe intrinsic value of gold makes it universally acceptable thus making it fit for making transactions. Additionally, The value of gold never fluctuates and thus it aids in the stabilization of the prices of commodities (Ogren Lars, pg. 35).