Foreign Policy publication writes that previously it was assumed that new sanctions against Russia would hit people from the inner circle of President Putin and companies close to him. However, the Kremlin's clumsy attempts to neutralize the damage caused by Western sanctions, together with falling oil prices only pushed the economic situation in Russia to a total collapse, Joinfo.ua reports with reference to foreign media.
According to Tim Ash from Standard Bank, the collapse of the Russian currency is most improbable one he has ever seen in the market over the last 17 years. However, the collapse of the Russian economy has been affected not only by the Western sanctions, but also a lot of other factors. In particular, they are cronyism, corruption, excessive dependence on gas and oil sectors. In addition, oil prices decline rapidly. Thus, the new sanctions against Russia have brought non-obvious problems of corporate Russia to the surface. They can lead to catastrophic consequences.
Sanctions against Rosneft lie in the heart of the crisis. Thus, the Russian oil giant is cut off from the international currency market. In addition, the company asks for a loan from the Russian government since till the end of the year it has to pay a big debt. The size of the requested sum is $ 88 billion.
According to foreign media, the Central Bank secretly makes a deal with the oil company that allows Rosneft to borrow money from banks on more favorable conditions. This very situation startled investors. They are concerned that cronyism of the Russian leader can reach actual printing of money to support the state-owned companies, run by Putin's rich friends.
Earlier, it was reported that U.S President Barack Obama would sign the law providing Russia with additional sanctions. In particular, it is referred to the Russian companies in the energy and defense sectors.
At the same time, Secretary of State John Kerry said that Russia has to change its policy towards Ukraine. According to him, sanctions are imposed not in order to hurt the Russians, but to persuade them to make their president give annexed Crimea back to Ukraine and stop interfering in the eastern regions of Ukraine.