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Russian stocks plunge as investors react to a stinging new round of economic measures.10 April 2018
The sanctions announced Friday by the White House target seven Russian “oligarchs” and 12 companies they own or control, 17 senior Russian government officials, a state-owned Russian weapons trading company, and a bank.
The Russian RTS index dropped by 11.4 percent yesterday, CNBC reports, and state-owned Sberbank lost 17 percent of its value, according to Reuters. The ruble suffered its worst one-day fall in more than two years.
U.S. assets from the targeted entities are frozen, and U.S. citizens are prohibited from doing business with persons or institutions on the sanctions list, CNBC says.
The new strictures mark the biggest escalation of Western measures against Russia since the sanctions imposed by the U.S. and the European Union after Russia’s 2014 annexation of Crimea. The new sanctions can cause serious long-term problems for the Russian economy, which is only just beginning a cautious recovery from the 2014 blow, Reuters writes.
One of the targeted oligarchs is Oleg Deripaska (pictured), a billionaire, close ally of Russian President Vladimir Putin, and owner of the aluminum giant Rusal, whose shares on Monday lost more than half their value on the Hong Kong stock exchange, CNN reports.
The White House justified its move on the basis of “destabilizing and malicious behavior by Russia,” but Russian Prime Minister Dmitri Medvedev called the U.S. move a manifestation of a protectionist policy “with a veil of sanctions drawn over it.” He condemned the sanctions as “illegitimate” under international law, according to the Russian state-run news agency TASS.
Medvedev urged the government to support the companies hit by the U.S. measures, especially the metals and energy industries and the defense sector. Medvedev said Russia reserves the right to respond to the sanctions and that “in a number of cases” countermeasures will follow.
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