New US sanctions against Russia may cause a strong fall of the ruble, Bank of America
The ban on the purchase of Russian Federal loan bonds will be the main risk for Moscow in 2018
New sanctions of the United States against Russia can provoke a strong fall of the ruble. It is reported by the Bank of America Merrill Lynch (BAML), reports RBC-Ukraine with reference to Reuters.
“The introduction of U.S. sanctions prohibiting the purchase of Russian Federal bonds, will be the main risk for Moscow in 2018”, – stated in the message.
According to the publication, BAML said that the scenario of the U.S. sanctions on sovereign debt, it is unlikely, and predicted that if implemented, the Russian authorities will likely be able to cope with the consequences.
It is noted that for non-residents as a whole accounted for slightly more than $51 billion on the Russian sovereign debt market: their share in external debt is 36,6% ($14.5 billion), in the internal, that is, Federal loan bonds – 33.2 percent ($37.2 billion).
“The pressure can be substantial and is likely to depend on the extent of the sanctions imposed. In particular, the attempt to completely cut off Russia from external capital markets could trigger renewed demand (in hard currency), similar to the surge in demand in late 2014,” the statement reads BAML.
Analysts believe that the effect will be felt most in the ruble, in a possible repeat of 2014, when the Central Bank has spent billions defending the currency, sharply increased interest rates and eventually allowed her to swim.