Published On: Mon, Apr 9th, 2018

New US sanctions rattle Russian stock market, ruble

Moscow: New US sanctions imposed on major Russian businesses and their owners sent Russian stocks and the ruble, the country’s currency, sharply down on Monday, exchange data showed.

The US Treasury announced on Friday it had imposed new sanctions on 38 Russian individuals and entities

Russia’s benchmark RTS stock index was down 11.33 per cent at 04:20 pm. According to data from Moscow Exchange, the ruble was at 59.11 against the dollar, down from $57.88 on Friday, after several months of relative stability.

The US Treasury announced on Friday it had imposed new sanctions on 38 Russian individuals and entities, including seven business leaders and 17 senior officials, for their alleged “malign activity” around the world.

As a result of the punishment, all assets of the designated persons and entities that are subject to US jurisdiction are frozen, and US persons are generally prohibited from dealing with them.

One of the targets of the new round of US sanctions is Russia’s aluminum tycoon Oleg Deripaska and his Rusal company, the world’s major primary aluminum producer.

On Friday, Rusal issued a statement warning that the new sanctions may result in technical defaults, which pushed its stock down by nearly 50 per cent on the Hong Kong Stock Exchange on Monday. In Moscow its shares fell by more than 25 per cent by Monday afternoon.

Russian Prime Minister Dmitry Medvedev said at a meeting with his deputies on Monday that the new sanctions were aimed at “promoting American commercial interests around the world in defiance of the current trade rules, contrary to the established order”.

“Of course, these decisions are unacceptable, and we consider them illegitimate, since they are generally outside the domain of international law,” Medvedev said, according to an official transcript of his remarks.

He said Russia reserved the right to respond, “including within existing trade agreements and procedures.”

Medvedev also asked the government to work out proposals on providing support to companies affected by the sanctions, including those in the metals, energy and defense sectors, as well as efficient measures in response to the US move.

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