Raiffeisen Bank made a mitigation of anti-Russian sanctions after the Brexit

In the second half of 2016, the Russian economy shows signs of recovery after the recession, according to a review of Raiffeisen Bank International (RBI) “Brexit would lead to the roller coaster in the third quarter, released on Friday, July 8.

Rising prices for raw materials and net exports contributed to this trend, says the author of the review Peter Brezinschek. This allowed the RBI to raise the forecast for Russia’s GDP from -2% to a negative 0.5% for 2016, and to evaluate growth prospects in the 2017 in the 1%. Inflation with double digit number in 2015 will drop to just above 7%, which will allow Bank of Russia to continue to ease monetary policy.

The ruble at the same time, according to Breznicka, most likely exhausted the potential of strengthening, given the strengthening of the dollar, and strengthened against the current values until the end of the year.

“The process of a British exit from the European Union can also influence the EU position towards Russia. The scenario envisaging the lifting of sanctions in the medium term, it seems more likely without the UK”, — stated in the review. Bresnick adds that “the EU tend to get rid of the issue of sanctions, as negotiations on Brexit will be a massive political burden in the coming years.”

Previously, analysts have noted that on the background of the British referendum held on 24 June and ended in an unexpected victory for the eurosceptics who insist on withdrawal from the European Union, Russia became the “safe haven” for investors.

Head of research at Fund Ashmore Group, Jan Dehn noted that the stability of the Russian market to the unexpected results of the referendum in the UK was the isolation of the country. The sanctions have helped Russia to adapt and to reduce dependence on American and European banks, he explained.

Agreed with him Sberbank CIB analysts: “Fluctuations of the market on Friday (the day of the referendum — ed.) if something and indicate, in the first place on some protective properties that the Russian market has acquired after the occurrence of the Ukrainian crisis”, — stated in the review of the investment.

Mainly, this is due to the massive outflow of capital which have since occurred, and reduce dependence on external debt. The sanctions regime, which limited the investors ‘ interest in Russian assets was partially saved Russia from the current turbulence, noted analysts at Sberbank CIB. The consequences of Brexit for Russia can be positive, they think: for example, the demarche of the UK could lead to a split in the positions of European countries regarding anti-Russian sanctions, and they will be mitigated, he added.