U.S President Barack Obama will sign legislation ordering new sanctions against Russia for its actions against Ukraine. The new measures would penalize Russia’s military and energy sectors. They will target weapons and defense companies. It would also provide more military aid to Ukraine.
Kiev will get $350 million in aid over the next two years. Ukraine will also get anti-tank weapons, surveillance drones, and counter-artillery radar. Both houses of Congress approved the bill unanimously and the President Obama is expected to sign it later this week.
The sanctions come as the ruble hit new record lows. The currency opened stronger on Tuesday but quickly gave up those gains. The ruble has now lost more than half its value against the U.S dollar. That’s despite the Russian central bank’s drastic steps to protect the currency. CCTV America’s Tom Barton reported this story.
New sanctions against Russia as ruble hits record lowsThe sanctions come as the rouble hit new record lows. The currency opened stronger on Tuesday but quickly gave up those gains. The rouble has now lost more than half its value against the U.S dollar. That's despite the Russian central bank's drastic steps to protect the currency. CCTV America’s Tom Barton reported this story.
Russia’s dependence on energy export revenues means falling oil prices are wiping billions off its budgets daily. Sanctions over Russia’s actions in Ukraine have effectively cut its state giant companies off from international finance. Panic has been spreading through the market.
“Now Russia certainly is in a crisis, an economic crisis which could,if its left unchecked, become a social crisis and then eventually a political crisis, and I think this is a key factor for the Kremlin and the way it reacts is the need to prevent that trend,” Christopher J. Weafer from Marco-Advisory said.
The ruble lost around 10 percent of its value in one day on Monday, its worst fall since Russia’s default of 1998. Overnight to Tuesday the central bank stepped in for the third time in the last several weeks, this time with a dramatic 6.5 percent interest rate hike, up to 17 percent. It was supposed to stop the ruble’s slide. But on Tuesday the Russian currency fell yet further.
The concerns are starting to come to the streets as well, with protests against the ruble’s fall.
“Now because of the dollar rate growing, loan holders instead of 40 (thousand rubles) of monthly payment have to pay 200 or 150 percent more. Now I am paying 70 (thousand rubles) instead of 35, it has changed in just two months. So people rose up and not only today, here, but everywhere,” Svetlana, a Protester said.
President Vladimir Putin has blamed both falling oil prices and the west.
CCTV America was joined by Kim Iskyan, an emerging markets analyst for Stansberry Research, to talk about Russian economy.