The expert said what will lead to tougher sanctions from the United States to Russia
On 2 August a group of us senators headed by Republican L. Graham introduced in Congress a bill providing for tougher sanctions against Russia as a response to possible RF interference in the electoral process in the United States, possible cyber attacks on infrastructure targets in the United States, as well as aggressive, according to the senators, the foreign policy of the Russian Federation.
7 Aug became available detailed version of the bill titled “Protection of U.S. security from the Kremlin’s aggression” on the strengthening of sanctions against Russia, and, as it turned out, it involves a number of additional serious limitations. In addition to the ban on the operation of new Russian sovereign debt and participation in energy and oil projects, the document proposed to ban operations in the U.S. and to freeze the assets of 7 Russian state banks.
In fact this could mean for the VEB, Sberbank, VTB, Bank of Moscow, Gazprombank, Rosselkhozbank, Promsvyazbank ban on payments in dollars with the use of correspondent accounts in the United States. It is obvious that this measure can have a pronounced negative impact on the banking business, which accounted for about 60% (excluding VEB) of total assets of the Russian banking sector.
The document also points to the need for systematization and evaluation of the effect (reduction of terms of preparation of reports on execution of sanctions) from the previously imposed sanctions against Russia, the creation of a special coordination office for the cooperation with the EU on the issue of sanctions, the establishment of the national centre against threats from Russia. The document contains the initiative to prepare within 180 days a report of all the assets that can be owned by the President of the Russian Federation, a decision on the status of Russia as a state, involved in the financing of terrorism (strictly speaking, by analogy with Iran and North Korea).
It is necessary to clarify that the bill contains a de facto ban on operations with Russian government debt with a maturity of more than two weeks, which should enter into force no later than 180 days after the adoption of the bill. Under the state duty in this case refer to paper, released by the Central Bank of the Russian Federation, NWF and the Ministry of Finance of the Russian Federation.
It is assumed that appropriate initiatives can be considered within a period of three months, that is estimated to early November. The authors of the bill hope that the document will be adopted before the midterm elections in the U.S. Congress, which will take place on 6 November. Individual experts-political scientists, these terms are evaluated as not very realistic.
New initiatives of the American politicians concerning, primarily, the possible restrictions on major Russian state banks, definitely worried international investors and create a negative background for the Russian financial market, which generally confirms the initial reaction of the Russian financial market, especially the segment assets fixed income and exchange rate.
Russian share indices since the beginning of trading session showed a decrease: the index of Masuri – moderately, by -0.9% and RTS is 3.0% (including the effect of the devaluation of the ruble). The majority of liquid securities have fallen in the range of 1.5 to 0.5%. Thus, NOVATEK has decreased by -1,3%, MMC Norilsk Nickel by 0.5%, LUKOIL by 0.5%, while Gazprom increased by +0.5% and Rosneft has not changed – on the order of +0.1 percent.
The OFZ curve shifted up by ~+20 b. p., more pronounced in the short and medium segments, while in the conditional long – for the first time in more than a year was overcome a psychological level of 8%. According to expert estimates, the sale was recorded as non-residents, and participants of the internal market. Independent assessment of the effect of the imposition of sanctions to the national debt in terms of yield range from 1.5 to 4 p. p. Curve sovereign Eurobonds moved up on average ~+15 b. p., more pronounced in the short and medium segments. Spread RUS-27 to UST10 widened by 20 b. . p. to 200 b. p.
The ruble to the US dollar locally devalued by almost +2.5% to an intraday high of April 65,05, having overcome the resistance level of 64.0 in case of breaking of a new resistance, a new reference point up to November 2016 – the area of 66.5 RUB.
Chief insights officer of corporate and investment block,
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