Russia's markets vote against Georgia policy


Russia's currency and stock market have suffered substantial losses since the outbreak of hostilities in Georgia three weeks ago. VOA Moscow correspondent Peter Fedynsky reports investors are nervous going into the weekend over the possibility that European heads of state may apply sanctions against Russia during a special summit on Monday to discuss the Georgian crisis.

Russia's RTS Index of leading stocks fell more than six percent the day hostilities broke out in Georgia and reached their lowest point in nearly two years when President Dmitri Medvedev formally recognized the independence of Abkhazia and South Ossetia.

Bloomberg News reports the Russian ruble is headed for its biggest monthly decline against the U.S. dollar in more than nine years as investors reduce their Russian holdings. In addition, Russia's Central Bank says the country lost more than $16 billion in the week following the launch of military operations in Georgia on August 8. Financial observers attribute the loss to nervous investors pulling capital from Russia.

Russia has been urging the West to refrain from sanctions which is a different tune from the earlier bravado about not caring if their was a new cold war. But the markets are already making Russia pay a price for its aggression in Georgia and its backing of the thugs of South Ossetia.


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