VEB: U.S. Sanctions Not to Affect Russian Debt, Banks

Russian state-run development bank VEB’s Deputy Chief Executive Officer and chief economist Andrei Klepach has said he does not expect new U.S. sanctions to affect Russia’s state debt and banks, Vestnik Kavkaza reports.

“I don’t think the U.S. will impose sanctions against the (Russian) state debt, otherwise it would work against the dollar and American companies. It is possible, though I do not think the possibility is high,” he said when asked by reporters about possible risks of U.S. sanctions to be imposed against Russia’s state debt and lenders.

In early August, a group of U.S. senators submitted a bill on new anti-Russia sanctions to Congress. The draft law includes a virtual ban on operations with new issues of Russian debt instruments with a circulation period of more than two weeks, as well as a ban for Russian state-run banks to conduct payment transactions in dollars.

The ruble slumped several days after the bill was published as investors belatedly digested the details. Bonds of Russia’s state development bank also sank this week, with many attributing the move to selling ahead of potential sanctions. Washington could impose those sanctions as early as November.

Previously, U.S. authorities also considered that option, but in February this year, the Treasury Department said that the move would have negative consequences not only for Russia but also for the global financial market and American investors.