Russia”s ruble sold off significantly today over one percent as the currency reacted to additional sanctions on the Russian Federation by the United States due to alleged chemical weapons use against Sergei Skripal in London and others.
Skripal and his daughter were hospitalized after being exposed to a Soviet-developed nerve agent; a policeman in the UK was also injured and one woman died after being exposed to the substance.
The executive order, released by the White House late Thursday, includes curbs to international financing and U.S. bank loans, though it wasn’t immediately clear when they could take effect or how sweeping they’d be. The second round of sanctions is being implemented because the Kremlin didn’t provide assurances required under U.S. law over the attack on a former Russian spy, a senior administration official said on Friday. The Kremlin denies any role in the poisoning, reported Bloomberg.
“The problem is that we don’t know what these sanctions actually involve,” said Alexey Tverdohleb, a trader at Bank Zenit in Moscow. “The current level of yields doesn’t price in all of the risks,” added Bloomberg.
The Russian economy is fragile as small business and entrepreneurs have difficulty overcoming oligarch control. Estimates are for anemic growth in 2019 around 1-2%.
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