Ruble Falls on U.S. Sanctions Bill Targeting Russian Debt

“This is a very harsh bill,” said Vladimir Miklashevsky, an economist at Danske Bank in Helsinki.

“The risk of sanctions on sovereign debt was the main reason why we were rather moderate when assessing the future of the Russian economy and its financial markets,” said Liza Ermolenko, an economist at Barclays in London.

Russia’s Finance Ministry declined to comment on the new sanctions bill.

If new U.S. sanctions target only new OFZ issues, their yields may rise by 2 percent and the ruble may weaken by 5 percent, Citi bank analysts said in a note.

The new bill, announced days before U.S. senator Rand Paul is expected to visit Moscow, also envisages sanctions against Russian political figures and oligarchs as well as restrictions on energy investment.

The ruble was also under pressure from market expectations that the Finance Ministry would further increase state purchases of foreign currency for its reserves.

Russian stock indexes were down. The dollar-denominated RTS index was down 2.2 percent to 1,135 points, while the ruble-based MOEX Russian index shed 1.1 percent to 2,289 points.


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