CCTV Script 22/08/18

The latest round of U.S. sanctions against Russia incudes entities and individuals who violated US sanction ban before.

US treasury department said in a note that the targets of sanctions include 2 entities and 2 individuals who are related to Russia, and the Treasury department accused them of evading US sanction ban and offering help to an entity that had already been sanctioned by the US. We know that from this year, US treasury department oftentimes launches sanctions against Russia amid Russia is suspected of interfering in the U.S. presidential election, dispute about Ukraine situations and Russia ex intelligence staff got attacked with neurotoxic, etc..

Sanctions measures announced before, including restrictions on the export of goods and technologies to Russia that are sensitive to national security etc., which will come into effect today, 22 Aug and after 90 days, more moves might come. Meanwhile, United States Congress is considering drafting legislation to impose more sanctions against Russia sovereign debt and its biggest bank, in order to revenge Russia who meddled in US presidential election. So we may foresee the US will take more aggressive follow-throughs to Russia. And presently, around 700 Russians and several Russian giants have been sanctioned by the US. How big is the negative spin of this kind of sanctions to Russia? Let's brief it from different aspects.

First in the foreign exchange market, Russia ruble has lost more than 75 against USD since Aug, almost being the worst performance since Nov, 2016. From this year Russia ruble has depreciated more than 16%. Pressure from currency depreciation will led to inflation, causing goods price soar in Russia: air tickets, drugs, perfume; chemicals, eggs, milk and dairy products may be affected.

On the business front, influence from US sanction is also limited. Before that, US sanction against Russia aluminum once fired the turbulence flashpoint, but cool down later. The 2nd quarter earnings from Russia aluminum industry saying they still maintain good profitability, with profit of USD 0.44billion. Russia also said they have reduced investment on US asset though; Russia authority is not planning to suspend some US companies temporarily. Additionally, Russia sold off US treasures also affected financial market.

Russia has heavily cut investment on US treasuries for consecutive 2 months, it reduced investment by $47.5 billion in April, and another $33.8 billion cut was seen in May, totally reduced to $14.9 billion, which is a new low since 207, so Russia is not the 33 biggest Creditor countries of US. And another noteworthy aspect is another round sanction that has already released but will take effect after 3 months, including downgrade diplomatic relations of US and Russia, close direct flights between Russia and the US and almost stop exporting from US to Russia outright. But there is not no ice-breaking possibility for their relationship. If Russia can cooperate with the US on a range of major issues, including Syria and Ukraine, he will cancel the sanctions against Russia, Trump said in an exclusive interview of Reuters. And now, US citizens' sentiment towards Russia is also improving.

According to Gallup, 58% Americans believe improving relations is more important, while 36% think they should take diplomatic and economy sanctions against Russia, we will keep an eye on this issue.