What Sanctions On And By Russia Mean? 10 Points

The Russian energy sector faces embargo sanctions by the US and other countries. The ban on imports could be imposed on selected companies in order to smooth market stress. Assets of Russia's Central Bank Reserves were frozen by the Group of Seven Countries, the largest state-owned banks were cut off from SWIFT , and numerous individuals including some oligarchs were sanctioned by the US/UK/EU and other countries. New Russian banks might be cut off from SWIFT (the EU's proposal), or all Russian banks might be cut off from SWIFT (the UK's proposal). Around 200 commercial companies are going to suspend, divest or cut off any ties with Russia. Among the 'great exodus' of commercial business from Russia, Russian issuers lost their presence in global indices as securities trading has been suspended since 25 February on the Moscow Exchange. Rating agencies put Russia's sovereign rating at pre-default level. Moody's cut Russia's rating to 'Ca' from 'B3'. S&P assigned ''CCC-. The market has started talking about technical default. Russia's Credit Default Swaps (CDS) - an insurance against a default, rocketed to near 3,000 basis points compared to 125 basis poiints at the beginning of 2022. There is a high probability that investors in various locations will not receive debt payments/coupons which is likely to be considered as a default. Future payments on eurobonds are in question. Key index providers called the Russian segment 'currently uninvestable' and announced plans to exclude Russia from indices: S&P, MSCI and FTSE for stock indices, and JPM and Bloomberg will exclude Russia from bond indices. The Russian response to the West's sanctions was to impose capital controls that hit external debt payments. Russia may end its oil and gas exports although a wholesale stoppage is unlikely. Russia may shut down Nord Stream I in retaliation for the shelving of Nord Stream II, Russia's Minister of Energy has commented. Russia may shut down the export of base metals (aluminium, nickel, and/or other rare metals like titanium) or impose restrictions on fertiliser exports. Last Saturday, President Putin allowed Russian borrowers to repay external debt only in ruble and only to investors in jurisdictions that have not implemented sanctions on Russia. Payments to other investors will be accumulated in the special 'S-accounts' but will not be available.

What Sanctions On And By Russia Mean? 10 Points

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