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30 Jul 2014
Russian economy points to further deterioration post-sanctions – BTMU
FXStreet (Barcelona) - Derek Halpenny, European Head of Currency Strategy at the Bank of Tokyo Mitsubishi UFJ, assesses the impact of recent sanctions against Russia.
Key Quotes
"As I look at the foreign exchange rates on my screen, there are hardly any currency pairs that have moved by more than 0.1% so far today. The one clear exception is USD/RUB, which is close to 0.5% higher following a further wave of sanctions announced by both the EU and the US yesterday."
"This latest wave of sanctions certainly appear to be the toughest yet and given the Russian economy was already on the verge of recession, these latest measures will likely tip the economy into a contraction that could turn severe. The sanctions are aimed at energy (but not gas), finance and defence".
"Details of the EU sanctions are expected this evening but the Obama administration added three banks to its sanctions list – Bank of Moscow, Russian Agricultural Bank and VTB Bank. The EU is expected to announce a ban on state-owned banks from issuing stocks or banks in European markets."
"The energy sanctions have apparently been chosen carefully in order to not curtail current production but to limit Russia’s ability to expand going into the future by cutting off exploration technologies. The arms ban also only applies to future deals."
Key Quotes
"As I look at the foreign exchange rates on my screen, there are hardly any currency pairs that have moved by more than 0.1% so far today. The one clear exception is USD/RUB, which is close to 0.5% higher following a further wave of sanctions announced by both the EU and the US yesterday."
"This latest wave of sanctions certainly appear to be the toughest yet and given the Russian economy was already on the verge of recession, these latest measures will likely tip the economy into a contraction that could turn severe. The sanctions are aimed at energy (but not gas), finance and defence".
"Details of the EU sanctions are expected this evening but the Obama administration added three banks to its sanctions list – Bank of Moscow, Russian Agricultural Bank and VTB Bank. The EU is expected to announce a ban on state-owned banks from issuing stocks or banks in European markets."
"The energy sanctions have apparently been chosen carefully in order to not curtail current production but to limit Russia’s ability to expand going into the future by cutting off exploration technologies. The arms ban also only applies to future deals."