Fears of new sanctions, Turkey and ‘Belousov list’ put pressure on RUB

RUSSIA ENERGY / FINANCE - In Brief 15 Aug 2018 by Marcel Salikhov

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RUB lost almost 5% last week based on fear of new US sanctions and negative EM sentiment. On August 2 a bipartisan group of U.S. senators has introduced a package of measures designed to protect "The Defending American Security from Kremlin Aggression Act of 2018 " (DASKAA). The bill proposes a list of new sanctions against Russia. The news didn’t have a significant impact on the markets until the full text of the bill was not leaked and published by Kommersant daily. This week the full text of the bill was published by the Congress. The most important measures are possible ban on Russian state banks to make USD transactions, sanctions on investment in any projects by the Russian government or government-affiliated companies outside Russia worth more than $250 million and ban on operations of the US people with new Russian state debt f new issues. There were no plans to introduce restrictions on the purchase of commodities. However, there is a proposal to recognize Russia as a "state sponsor of terrorist country" theoretically allowing in the future to impose more stringent sanctions based on Iranian model. The news caused rapid RUB devaluation and further selling pressure on local bonds and equities. August 8, the US State Department announced new export restrictions in response to accusations Moscow used a “Novichok” nerve agent to poison Sergei Skripal, a former Russian spy in Britain. This sanctions are divided into two rounds . First, trade and financial restrictions are imposed, for example, on the export of dual-use civil electronics to Russia. If within three months Russia does not comply with its requirements (stopping the use of chemical weapons and granting ...