The list of sanctions against Russia in the watch to derail the country’s economy

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Late last night it became known that five us senators from both parties introduced a bill on new sanctions against Russia under the name of “Defending American Security from Kremlin Aggression Act (DASKA) of 2019”. The text of the bill is unknown. On the site of one of the senators a brief press release. According to him, and missed bill version 2018 has been redesigned.
In particular, now also proposed:
– sanctions against a foreign project to produce liquefied natural gas;
– sanctions against Russian banks, “supporting Russia’s actions to undermine democratic institutions in other countries”;
– sanctions against Russian cyberactor;
– sanctions against sectors of shipbuilding, if Russia will violate the freedom of movement in the Kerch Strait or elsewhere;
– sanctions against a number of individuals, including the “oligarchs”.
Also lists previously announced sanctions against Russian public debt and to the support of the development of oil resources in Russia.
Reuters reported that the document “represents a more stringent version of the bill introduced last year.” However, we do not see significant tightening. On the contrary, this time no mention of sanctions against the calculations of the Russian state-owned banks in US dollars – potentially the most dangerous for the Russian economy and financial system step.
The vote on the previous version of the law on elections to the Senate and the Congress never happened. Before the analysis of the updated text of the bill it is difficult to say what prospects will the new attempt. However, as practice shows, the initiatives of senators consistently receive negative reviews of the U.S. Treasury, as may affect the economic interests of the United States. We continue to believe that sanctions of the Senate will be introduced in the Lite version compared to the announced list of restrictions.
In addition to the so-called “black” SDN list, which lists individuals and organizations with whom US citizens and permanent residents are prohibited to do business, we can expect the introduction of restrictions against sovereign Russian debt in the primary market. Restrictions on payments in dollars or against the secondary market for sovereign debt is unlikely.
Now the dollar higher inherent risks. In particular, the sanctions, the discount can reach up to 6 RUB USD/RUB. Thus, in the case of sanctions, we do not expect a significant impact on the market.
For 2019, we maintain the forecast average annual exchange rate of the dollar/ruble near the mark 65. Despite the tightening of “fiscal rules”, the quotes of the ruble should be to support the reduction of global risks, and are still awaiting us in the second half of 2019 reduction of the key rate to support demand for rubles in the framework of the carry trade.
Timur Nigmatullin,
“Opening Broker”