MOSCOW/LONDON, Nov 20 (IFR) - US and European sanctions are inadvertently providing a boost to the same Russian companies they are supposed to punish, with some in Russia boasting the restrictions have triggered a reworking of the local financial system that has made access to funding cheaper and easier. At the heart of the financial rewiring are domestic banks such as Sberbank and VTB. Despite being barred from global capital markets, both have seen a surge in corporate deposits as Russian companies fearful of an escalation in Western financial sanctions repatriate cash piles held abroad. As well as providing sanctioned banks with a cheap source of hard currency, such inflows have ironically put the Russian banking system in a better position to help other companies shut out of global markets.
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Natylie Baldwin is author of The View from Moscow: Understanding Russia and U.S.-Russia Relations available in e-book and print. She has traveled throughout western Russia since 2015 and has written several articles based on her conversations and interviews with a cross-section of Russians. She blogs at (more...)