Russian capital markets activity was clipped by April’s US sanctions that targeted wealthy Russians with alleged links to the Kremlin and their companies.
These hit the companies targeted and markets as a whole, as global investors worried over who might be struck next.
Many have been pinning hopes on the US and Russia coming to a deal that lifts sanctions and reopens international capital markets for Russian corporates.
But the Democrats blame Russia for hacking the 2016 presidential election and helped Hillary Clinton lose the vote.
Konstantin Vyshkovsky, director of the public debt department at the Russian ministry of finance, told the Moex London forum on Thursday that “irrespective of the political redistribution in the US” Russia still relies on “the common sense of the US authorities”.
He added that any attempt to ban Russian sovereign debt would be hugely damaging for the US and Russia. But such a ban has been proposed in a bipartisan bill that is before the US Senate, which remains under Republican control.
The problem for investors in Russia is that there is not much political stock in common sense.
The Democrats now have the power to heighten pressure on Russia and are unlikely to find much opposition from Republicans.
Issuers and investors in Russian capital markets should not except a spike in deal activity any time soon.