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Russia Calls U.S. Sanctions Unacceptable, Shares In Deripaska-Controlled Firms Plunge

Oleg Deripaska has called the U.S. decision to impose sanctions on him "groundless, ridiculous, and absurd." (file photo)

Russian Prime Minister Dmitry Medvedev has called the latest round of U.S. sanctions unacceptable and illegitimate, and ordered the government to draft potential retaliatory steps as well as measures to support affected Russian companies.

Medvedev spoke on April 9, three days after the United States imposed asset freezes and financial restrictions on a slew of Russian security officials, politicians, and tycoons believed to have close ties to President Vladimir Putin -- part of an attempt to punish Moscow for what the U.S. Treasury Department called "malign activity around the globe."

The sanctions were levied under a 2017 law passed by Congress over President Donald Trump's objections.

In January, the administration came under criticism in Congress and elsewhere for releasing an "oligarchs list" -- naming the business and political leaders who could be potentially targeted -- but not actually imposing any penalties.

In fallout from the new sanctions, Russian aluminum giant Rusal saw its share price plummet after the company and co-owner Oleg Deripaska were targeted, prompting the producer to warn of potential debt defaults.

Rusal stock nearly halved to HK$2.39 in Hong Kong trading on April 9, while aluminum prices surged. Rusal shares were losing more than 20 percent in the Moscow stock exchange.

Trading of Deripaska's En+ Group, which manages Deripaska's assets, was temporarily halted in London after its shares lost almost one quarter of their value.

Russian stock indexes and the ruble also took a hit. The dollar-denominated RTS stock market index was down more than 4 percent, the biggest fall in a single day in more than a year, while the Russian currency was 0.9 percent weaker against the dollar.

Meanwhile, Deputy Prime Minister Arkady Dvorkovich suggested the state would step up support for Russian companies hit by U.S. sanctions.

"Support for these companies is being provided on a consistent basis. We are very attentive toward our leading companies -- these are thousands-strong collectives that are very important to our country," Dvorkovich told journalists when asked about the issue.

"But in the current situation, as their situation deteriorates, we will provide this support."

The U.S. Treasury Department last week included Rusal and other companies linked to billionaire Deripaska on a list of 12 Russian firms hit with financial restrictions, in the latest U.S. effort to punish Moscow for "malign activity around the globe."

Asset freezes and financial restrictions were also imposed against more than two dozen members of Russia's political and business elite thought to have close ties to President Vladimir Putin, including Deripaska.

Rusal said the move may result in technical defaults on some credit obligations and be "materially adverse to the business and prospects of the group," casting a cloud over its future performance.

Rusal is the biggest aluminum maker outside China, accounting for some 7 percent of the world's production.

Deripaska has called the U.S. decision to impose sanctions on him "groundless, ridiculous, and absurd."

Russia has not retaliated against the United States over the new sanctions, which were announced on April 6, but Foreign Ministry spokeswoman Maria Zakharova said in April 9 that it was considering how to respond.

"We have a whole list of possible measures that are being studied," Zakharova said.

Asked whether the Russian response would be harsh, Zakharova said that she "would rather not jump the gun."

"We are considering our countermeasures, as we always do," she said.

With reporting by AFP, Bloomberg, TASS, and Interfax