Economy 14-09-2018

The Bank of Russia sees no major problems if the US imposes sanctions on sovereign debt

The governor of the Bank of Russia, Elvira Nabiulina, dismissed the effect that the possible sanctions of the United States could have on the sovereign debt of the country.

In early August, six US senators proposed extending unilateral restrictions to Russia's public debt.

"We do not see big problems because of the imposition of those sanctions," said Nabiúlina when appearing at a press conference.

The president of the entity also played down the possible impact of the unilateral US measure on the financial system and the Russian economy.

"We have a very low external debt," he argued.

The senior official said that currently foreign investors have Russian bonds for an amount of 26.000 million dollars, a figure much lower than the reserves.

He noted that his institution was willing to provide the necessary support to the country's banks in case of new US restrictions.

"We can establish some relaxation for our financial institutions to adapt better to fluctuations in the prices of bonds, as we did in 2014," he said.

Nabiúlina stressed that the monetary authorities and banks are preparing for the different unfavorable scenarios.

Likewise, the Bank of Russia modified its forecast of GDP growth for 2020, ensuring that an increase of 1.8% or 2.3% will be observed, according to the president of the monetary authority, Elvira Nabiúlina.

Before the entity published a forecast that included an increase in GDP between 1.5% and 2% for that date.

"The GDP growth figure for 2020 increased to 1.8% or 2.3%," Nabiulina told a news conference.

The expert said that by 2019 the Russian GDP will register an increase between 1.2% and 1.7%.

"If the structural measures are met, in the following years economic growth could accelerate," said the head of the regulator.

The Bank of Russia raised the reference rate from 7.25 to 7.5% this month.

The United States has been imposing unilateral sanctions on Russia for several years with different arguments.

The latest package of restrictions was justified by the alleged poisoning of former British spy agent Sergei Skripal and his daughter Yulia with a deadly toxin in the British city of Salisbury last March.

Washington also used as a pretext the referendum carried out by the inhabitants of Crimea in March 2014 to split from Ukraine and join Russia in search of prosperity.

In February of that same year in Ukraine there was a coup d'état and until now that country is still submerged in an internal armed conflict that has left more than 10,300 dead, according to UN estimates.

The United States also imposed unilateral restrictions on Russia for alleged interference in the 2016 presidential election in which Donald Trump defeated the pro-government Hillary Clinton against all odds.

The alleged Russian interference in the US electoral process was denied both in the Kremlin, which called the accusations totally unfounded, and in the White House.


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