Your assignment is to prepare and submit a paper on the responses russia and india to the global financial crisis.

Your assignment is to prepare and submit a paper on the responses russia and india to the global financial crisis. When examining Russia’s response to the global financial crisis, it would be pertinent to note that above all, the Russian economy is heavily dependent on exports of oil and this forms a significant percentage of the GDP for Russia. Since the Russian economy also has a dual financial system, which consisted of one part serving the households and the other part serving the corporates and foreign markets, the Russian response was a twofold and two-pronged calibrated one. This two-pronged approach is explained further in the succeeding paragraphs. It needs to be mentioned that Russia was relatively “prepared” for the global financial crisis and hence it’s response to the crisis must be seen in this context (Sestanovich, 2008).

On one hand, Russia opted for the step-wise devaluation of its currency so as to bolster the real effective exchange rate. As mentioned above, since the Russian economy was heavily dependent on exports of oil, the exchange rate at which oil was exported had to be “adjusted” to take into account the fall in exports. Hence, the Rouble was devalued in a phased manner to make the necessary revaluation of the exchange rate so that the real rate at which oil was exported would be competitive to Russian exporters of oil. The merits of a gradual depreciation of the Rouble as opposed to a one-off devaluation can be argued from the theoretical perspective of a steep fall in the value of a Rouble to a calibrated fall thus giving economic agents ample time to adjust their assets (Sutela, 2010).

The second part of Russia’s response was to release the contingency fund or the reserve fund to support the financial system that was reeling under the impact of outflow of funds and which was dependent on foreign markets for business.&nbsp.&nbsp.