Limited Macro Impact From New Sanctions
The latest wave of sanctions by the US against Russia has confirmed our view that the West's response to Russia's alleged actions to destabilise Eastern Ukraine will remain of limited/symbolic nature, absent a military invasion by Russia of mainland Ukraine. However, while the direct economic impact of the measures on Russia's economy will be limited, the impact on long-term investor sentiment, capital flight and rouble volatility will be substantial.
Latest Wave Of Sanctions
On April 28, the US issued asset freezes and visa bans targeting seven individuals from Russian President Vladimir Putin's inner circle, with the most prominent individual involved being state oil company Rosneft's chief executive, Igor Sechin. In addition, the White House's response included a list of 17 companies, which will also be subject to asset freezes, with the US Department of Commerce imposing a ban on "the export, re-export or other foreign transfer of U.S.-origin items to the companies." The EU response, issued on April 29, has been even more underwhelming than the US' as it does not include companies but only individuals from Putin's inner circle, as well as leaders of the separatist movement in Eastern Ukraine.
|No Major Rebound|
|Russia - Main Russian Stock Index MICEX , Weekly|