New anti-Russian sanctions imposed by the US earlier this month over alleged Russian involvement in poisoning of Sergei Skripal and his daughter came into effect on August 26. Russian News agency TASS has interviewed several experts to understand what impact the sanctions may have.
The second round of sanctions over Skripal case prohibit US banks “from participating in the primary market for non-ruble denominated Russian sovereign debt and lending non-ruble denominated funds to the Russian government.” The sanctions also include “US opposition to the extension of any loan or financial or technical assistance to Russia by international financial institutions, such as the World Bank or International Monetary Fund” and the “addition of export licensing restrictions on Department of Commerce-controlled goods and technology.”
Renaissance Capital’s experts told TASS that the sanctions would not affect the market as much as expected, because the announcement came earlier and market participants had time to take the sanctions into account and make all the necessary preparations.
“Even if the Finance Ministry faces a lack of demand, it will be able to replace foreign borrowing with domestic loans,” they added.
Vladimir Bragin, Alfa Capital’s expert, explained that “investors usually respond to such moves immediately, they don’t wait for sanctions to take effect.”
Natalia Orlova, Alfa-Bank’s Chief Economist, said that “the toughest sanctions over the Skripal case concern a ban on the US banks’ participation in the primary market for non-ruble denominated Russian sovereign debt.”
“However, Russia’s national debt stands at just 12% of its GDP and the federal budget will remain in surplus as long as oil prices don’t drop to lower than $50 per barrel. In other words, these restrictions won’t seriously harm Russia’s economic interests,” she added.
According to media reports and experts’ opinions, the US will impose more sanctions against Russia. “However, such threats don’t come as a surprise for investors, the Russian market has been on high alert for quite a while, so investors have built up immunity to such developments,” said Yuri Kravchenko, an analyst.
Natalia Veselnitskaya – official website