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Western Sanctions Begin to Ripple Through Russian Economy

  • VOA News

A man walks past an information screen on display inside the office of the Moscow Exchange in the Russian capital Moscow, March 14, 2014.

A man walks past an information screen on display inside the office of the Moscow Exchange in the Russian capital Moscow, March 14, 2014.

The effect of U.S. and European economic sanctions aimed at Russia's business and political elites is beginning to ripple through the country's economy.

Two American credit companies, Visa and MasterCard, blocked transactions with their cards Friday at several Moscow banks. The institutions said they were complying with U.S. law after U.S. President Barack Obama imposed new sanctions the day before to protest Russia's annexation of Ukraine's Crimean peninsula.

Meanwhile, Russia's Finance Minister Anton Siluanov said the introduction of sanctions undoubtedly has had a "negative" impact on international perceptions of the Russian economy. He said that could lead to Russia abandoning plans to borrow $7 billion on international financial markets this year.

Fitch, an international credit rating company, lowered its outlook for the Russian economy from stable to negative, the same assessment Standard & Poor's made on Thursday. The Russian stock market has fallen more than 10 percent this month as Moscow's dispute with Western nations over its actions in Crimea has escalated.

But some Russian business executives have downplayed the effect of the U.S. sanctions.

Russian Railways chief Vladimir Yakunin said he is in "good company" with other close associates of Russian President Vladimir Putin in being targeted by Mr. Obama's sanctions.

He wrote on his blog, "I cannot hide that I felt flattered."

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