Russia: More sanctions coming? - Rabobank

Two GRU officers were behind the Novichok poisoning of a former Russian spy on British soil and unfortunately, a soon-to-be-orphaned country (post-Brexit UK) figured out who was behind the plot, notes the research team at Rabobank.

Key Quotes

“Although the West had already pointed its finger to Russia immediately after the incident happened, the Kremlin has always denied any involvement. Evidence presented by UK PM May yesterday substantiates the West’s claims, and is set to cool the relationship with Russia even further.”

“The availability of tangible evidence against Russia raises the odds that UK allies –most importantly the US– will enforce further sanctions on Russia, which would weigh on the rouble.”

“Sanctions imposed by the US back in April have already left their mark on Russian assets, including the currency, which fell sharply in early August after the US announced a first round of sanctions. Subsequent sanctions would certainly put further pressure on Russian markets.”

“The Kremlin is already working on some damage control: Deputy Finance Minister Kolychev tried to reassure investors that “in a very stressful scenario when we see the conditions of a market failure […] the central bank and the government have the tools to intervene”.”