Report: New possible US sanctions may hurt Russia’s sovereign debt

WASHINGTON, Dec 7 (PRIME) -- The new possible U.S. sanctions may hurt Russian sovereign debt, and cover several sectors, including energy companies and banks, CNN news channel reported late on Monday quoting sources familiar with the matter.

The sanctions should deter Russia’s alleged invasion of Ukraine, and besides hurting sovereign debt, may prohibit Russian oligarchs from travelling and potentially block their access to the U.S. banking and credit card systems. The list of possible sanctions also includes Russia’s disconnection from the SWIFT interbank exchange system.

The U.S. is also seriously discussing a ban on access of Russian energy companies to the debt markets in case the alleged invasion happens. Washington is discussing introduction of the worst sanctions ever together with the E.U., sources told CNN.

The U.S. administration has not yet decided whether and when the new sanctions will be imposed. There also is a threat of Russia allegedly responding to the U.S. and E.U. sanctions by using energy resources as a weapon, according to the news channel.

Bloomberg reported that the sanctions, that will also cover the Russian Direct Investment Fund (RDIF), also could prevent Russia from converting the ruble into the U.S. dollars and other foreign currencies.

First Deputy Chairman of the Foreign Affairs Committee of the Russian parliament’s upper chamber Federation Council Vladimir Dzhabarov told PRIME that disconnection from the SWIFT system will hurt the economic interests of the U.S. and the E.U.

“It is unlikely that they would disconnect us from SWIFT, it is nonsense. Will they start transporting cash to us in bags to pay for gas?” he said, adding that sanctions are a double-edged sword.

Deputy of the parliament’s lower chamber State Duma Adalbi Shkhagoshev said that the U.S. would lack courage to introduce serious sanctions for fear of a possible response.

“They have been talking about it for a long time, but I am sure that there would be no sanctions scenarios, even though we are ready for anything. The U.S. will not do that. We are not North Korea, we are not Iran, we are not some other country,” he said.

“They will not use the nuclear option, they lack potential courage for that. And by potential courage I mean that they understand what we could respond with.”

If Washington imposes new sanctions, they will not be far from the existing sanctions that have an almost zero impact on Russia’s development, he said.

Russia has repeatedly dismissed Western and Ukrainian accusations of ‘aggression,’ saying that it does not threaten anyone or intend to attack anyone, and that statements about an alleged ‘Russian aggression’ are used as a pretext to place more NATO military equipment near the Russian borders. The Russian Foreign Ministry earlier noted that such statements are both ridiculous and dangerous.

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