Russian markets drop further as Putin unveils new food sanctions
RUSSIAN stocks took another hit yesterday, as the government in Moscow announced the expansion of its retaliatory sanctions, hitting out against the EU’s agricultural sector in particular.
The Russian Micex index dropped by another 1.68 per cent to 1,335.14. The index has dropped by more than a tenth since the first week of July, before the tragic MH17 crash, which prompted the most recent rounds of sanctions.
Russian President Vladimir Putin signed off on a new tranche of sanctions yesterday, limiting the imports of agricultural products from the rest of Europe.
Government departments have been told to compile a list of items for Putin, which will then be “banned or restricted” for one year.
The Russian military had also massed around 20,000 troops on the border of Ukraine yesterday, prompting concerns that the ongoing conflict between the Ukrainian military and pro-Russian separatists in the could be used as a pretext for an invasion.
“If Russia does not go beyond its current level of semi-covert support, the Ukrainian forces may slowly prevail,” said Berenberg’s Holger Schmieding.
“Or Russia may step up its support for the pro-Russian irregulars to the point of open invasion – with repercussions that would likely push the Russian economy into a deep recession while interrupting the European recovery for a while.