The Russian government has vowed to check the effects of US sanctions and has rubbished reports of steep falls in the currency and its financial markets by terming it short-term volatility. US had imposed fresh sanctions on Russia targeting the elites who are close to President Putin in a highly calculated response to Russian meddling of US Presidential elections in 2016.
There was an apparent dip in investor sentiment seen in Russian markets as the ruble saw a sharp fall over last two days against the US dollar. There have been mounting fears of more sanctions emanating from proposals of two US Congressmen who have called for increased sanctions due to allegations of spy-poisoning in Britain with a military grade nerve agent, which fuelled a sell-off leading to a 3 percent fall in the value of ruble and a high jump in risks in Russian credit markets.
The financial distress has led to rising troubles for President Putin who has won the elections on the promises of increasing the living standards of people and make heavy investments in education, healthcare and infrastructure projects. The Russian economy which has been in the recovery mode will now have to earmark the funds for bailing out of sanctioned companies. The fall in Ruble will have a direct impact on imports.