Russia Blasts New U.S. Sanctions Plan as Ruble Slides

Russia threatened to retaliate for a new round of sanctions announced by the U.S., as the ruble slid amid the spiraling tensions between the Cold War rivals.

The U.S. said it was imposing the new restrictions to punish President Vladimir Putin’s government for the March 4 nerve-agent attack on former spy Sergei Skripal and his daughter in the U.K.

The moves came just days after a bipartisan group of senators proposed a law mandating “crushing sanctions” -- including on purchase of new sovereign debt and on big state banks -- to punish Russia for election interference.

The threatened measures spooked investors, driving the ruble to the lowest levels since 2016, though it later made up some of the drop. Stocks like Aeroflot and VTB, which could be targeted by some of the new restrictions, fell more than 7 percent but recovered most of their losses.

“It’s hard to tell the extent of the sell-off,” said Viktor Szabo, a money manager at Aberdeen Standard in London. “The question is whether these sanctions will reach key energy and financial names and also the sovereign. All of these are mentioned in at least one of the draft bills and add the August low liquidity environment, which amplifies the market moves.”