Wagner Insurrection to Pile Pressure on Russia’s Struggling Economy

The confrontation with the paramilitary Wagner Group is likely to erode confidence in Russian President Vladimir Putin’s government and pile more pressure on an economy already strained by Western sanctions, said Erik Meyersson, chief emerging market strategist at SEB Group.

“There’s only one direction for Russian financial assets in the short term,” said Meyersson. “Even if you think this is a failed attempted coup…there’s clearly going to be a weakening of the Russian regime and that should put a sizable risk premium on Russian assets.”

Already on Saturday signs of financial stress were emerging. The ruble had already fallen 3.2% against the dollar on Friday and currency prices from Russian banks on Saturday suggested the ruble would slide further when the market reopens on Monday.