Goldman Sachs: Sanctions could make Russian assets ‘uninvestable’

Goldman Sachs says tougher sanctions on Russia are beginning to bite, and could soon see the country’s assets become “uninvestable.”

This is the view of Kamakshya Trivedi, the investment bank’s head of FX and emerging market strategy.

In an interview with CNBC on Monday, Trivedi said that the above scenario will likely play if one major factor fell into place- sanctions succeeding in freezing about $630 billion of Russia’s foreign reserves.

If the stockpile is effectively inaccessible, then Russia’s currency and assets are likely to be hit hard amid high inflation and depreciation.

The 2014 Crimea annexation

Trivedi pointed to the 2014 Crimea annexation as a period when Russia also experienced increased “decumulation” of reserves. He said the conflict saw oil prices plunge, the ruble plummet, and markets sell-off. 

The analyst noted that the period saw over $100 billion in reserves used to buffer the currency and the broader economy.

Looking at the current geopolitical environment, the Goldman Sachs strategist said a similar, if not worse outlook, is possible. According to him, making the foreign exchange reserves “completely inaccessible or not very accessible” is a recipe for significantly more pain and volatility.

I think those assets, apart from the technical stance of how people transact in them, are increasingly going to become uninvestable for a lot of global investors,” he added.

For investors looking for alternative markets, the Goldman Sachs strategist says emerging markets such as Latin America and the Gulf region might be the answer.

These markets, he notes, are not close to the conflict zone and thus offer a medium-term proposition that could be attractive.

The post Goldman Sachs: Sanctions could make Russian assets ‘uninvestable’ appeared first on Invezz.

Disclaimer:, its managers, its employees, and assigns (collectively "The Company") do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2022 All Rights Reserved.

To Top