Many Western and some Russian commentators have seriously misread what the new American sanctions have done to the Russian stock market and ruble exchange rate, US-based Russian analyst Aleksandr Nemets says. Yes, those sanctions initially pushed down both, but both have largely recovered.
Moreover, the threat of any additional sanctions appears to have passed as has the threat that Russia would be cut off from the SWIFT payments system, something that would have had a most serious impact on the Russian economy and its ability to do business.
Consequently, Nemets continues, all the media hype notwithstanding, it is a profound mistake that Moscow now is mired in “fear and despair.” [quote]Russians were initially genuinely frightened that the sanctions imposed earlier this month would be expanded upon, but when they saw that was not the case, they breathed a sigh of relief, not despair.[/quote]
There are two reasons why the Russian equities market and ruble exchange rate, after taking an initial hit, have come back: oil prices continue to rise, and “talk about new sanctions still remains just that, talk.” And what Moscow feared most, being cut off from SWIFT, now is not likely to happen.
Nemets cites with approval a comment by the Bloomberg news agency that this reflects Moscow’s judgment about US President Donald Trump. “Trump,” it says, “is the most valuable Putin resource. It is crazy to deny this. And Putin will take care of Trump and not even try to use the mountain of compromising information he has about him against him.”
The reason is simple, Nemets argues: “as long as Trump sits in the White House, Putin will confidently keep control in the Kremlin; and the world will become ever more chaotic.”
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