Latest US sanctions on Russia to have little impact on sovereign debt markets

Author: John Crabb | Published: 22 Aug 2019

The latest of a steady stream of sanctions imposed by the US government on Russia will cause little in the way of a material impact to the country's sovereign debt market. This is despite new restrictions that prevent US banks from participating in the non-ruble-denominated Russian sovereign markets.

The sanctions may sound threatening and appear to be an imposition of power from the Trump administration. However, it is arguably an example of the White House making a political move that may look and sound like a display of strength against the Russians – but is, in reality, only preventing US financial institutions from making investments they had already been steering clear of for some time. Sources are calling it a case of smoke and mirrors.

"Russian eurobond issuances have been a tough market anyway. US banks have already stepped away from lead roles," said a source close to the issue who...