American sanctions come thick and fast, thus forcing the month of August 2018 to become "black" for the Russian financial market.
After the Senate had submitted a draft including bans on investment in the public debt of the Russian Federation and large state-owned banks' settlements in dollars, Washington imposed new restrictions on the supply of technology, in particular for the aviation industry. In addition, the Kremlin was accused of violating the Chemical Weapons Convention.
If Moscow refuses to allow UN inspectors to investigate their chemical facilities, by the end of November the US can worsen diplomatic relations, ban Aeroflot flights, and halt the supply of all its goods to Russia.
Aeroflot shares fell by 12% to a 2-year low. Sberbank stock that had dropped by 4.24% the day before, fell further by 5.7%, and their holders recorded a total loss of 483 billion rubles for just over a day. VTB shares collapsed by 7% on Thursday and by 9% in two days, depriving the bank's capitalization of 62 billion rubles.
After Kommersant daily unveiled the details of a draft law on new anti-Russian sanctions, the currency trading on the Moscow stock exchange was marked by a significant weakening of the ruble. The euro exceeded the mark of 75 rubles, last time the same rate was registered on May 8. The dollar rose to 64.69 rubles for the first time since June 19. During the whole trading session on Wednesday, there was increasing pressure on the ruble with the greenback overcoming a psychologically significant rate of 65 rubles (for the first time since April 11) .
The collapse on Wednesday, when the dollar went up by 2 rubles, and the state debt market hit an annual low, was followed by a new decline in the ruble, shares, and government bonds.
Against the background of the State Department statements about the introduction of another package of sanctions for poisoning former Russian spy Sergei Skripal in Salisbury, on Thursday, trading on the Moscow stock exchange began with another rise of the dollar, which several minutes later overcame the highest rate since August 2016, 66 rubles.
Elections to the US Congress will be held in November, until then experts advise speculators to closely monitor the specification of new sanctions.
As for the further movement, the respondents of RIA Novosti believe that the dollar-ruble pair, at its best, will go up to 70, then there will be correction. The worst-case scenario assumes a rise to 72 and consolidation at this level.
Analysts compare the events occurring now with the beginning of April, when the US suddenly imposed sanctions on a number of Russian legal entities and individuals, which caused the collapse of the ruble and the Russian stock market. However, this time, oil prices are declining rather than growing as before.
Experts at Union Bancaire Privee in London predict a great period of sales. That’s what they write: “The market should have already adjusted yesterday but the risk is that there could still be follow-through as people have simply been unable to get out.”
It should be noted that August in different years has been an unsuccessful month for the Russian economy and the ruble. August 1998 is the most memorable in the history of modern Russia. The state declared a "technical default" on its debt obligations and ceased to maintain the rate of the national currency. As a result, for two weeks since August 15, the official exchange rate for the ruble against the dollar had increased from 6.29 to 9.33 rubles. A large-scale devaluation was launched, and by early 1999, the dollar was three times as much, 20.65 rubles. Another "black" August was observed in 2015. At the beginning of the month, the dollar was 58.74 rubles, but by August 25, it was 70.75 rubles.
