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US sanctions policy sets dangerous precedent for foreign investors, says RDIF head

April 10, 12:30 UTC+3 MOSCOW

Kirill Dmitriev believes that the big players and owners of US stocks will slowly reduce exposure to the US currency because they see a dangerous precedent

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MOSCOW, April 10. /TASS/. Washington’s sanctions policy creates a dangerous precedent for international investors, including American ones, Head of the Russian Direct Investment Fund (RDIF) Kirill Dmitriev said on Tuesday.

"Many sovereign countries see that the US sanctions policy sets a very dangerous precedent for them," he noted.

Dmitriev believes that Washington’s actions affect US investors. "This is a big story where the major players and owners of US stocks will slowly reduce exposure to US currency because they see a dangerous precedent," he pointed out.

According to him, despite Monday’s collapse of the Russian stock market by 10%, Russian companies are undervalued in general. "Many of our long-term sovereign partners - the largest sovereign funds in the world - believe that the Russian market is undervalued, and yesterday at the end of the day many of them began to invest more actively in it. They see that if good Russian companies fall by 20%, then this is the perfect opportunity to buy their shares. Such purchases were made last night and will be made today," Dmitriev said.

"The fundamental situation on the market is that Russian companies are undervalued. Of course, there are risks, including significant geopolitical ones, but we need to look at this from a longer-term fundamental perspective," he emphasized.

Shares of Russian companies, sovereign bonds and the ruble fell on Monday, reacting to US sanctions, announced on April 6. In particular, the ruble-denominated MOEX Russia Index (previously MICEX) saw a 9.5% drop, while the dollar-denominated RTS fell by 11.9%.

 

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