Economists estimate the potential impact of new US sanctions on Russia

by time news

The results of Russia’s negotiations with the United States and NATO, including on the issue of non-alignment of Ukraine to the alliance, caused market concerns: Renaissance Capital economists Sofya Donets and Andrey Melashenko see increased risks of escalation, although a full-fledged military conflict between Russia and Ukraine and related tough sanctions are still far from the basic scenario of the investment company. In their new report, they assessed the new draft US sanctions against Russia in case the latter invades Ukraine as moderately harsh: if implemented, the ruble could weaken by 3–6%, OFZ yields could grow by 1.2 p.p. i.e. it will not lead to tangible consequences.

But since the project provides an opportunity for the US president to significantly expand the sanctions list beyond the specified companies or individuals (primarily in relation to the financial and mining sectors), the impact may be critical – up to a collapse of the ruble by 20%, economists write. And here everything will depend on who can fall under an additional blow. However, according to the authors of the report, Russia, with its strong fiscal position, significant reserves, de-dollarization course and potential countermeasures, now has a rather high “pain threshold”. And the international costs of the consequences of sanctions may be too high to warrant tough measures.

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