“I wouldn't, if I were you, invest in Russia equities right now … unless you were going short,” Carney told reporters.
President Obama has leveled sanctions against a number of Russian and Ukrainian individuals to dissuade Moscow from annexing the disputed Crimean region into the Russian Federation. But those efforts failed to stop Russian President Vladimir Putin, who earlier Tuesday signed a treaty joining Crimea with Russia.
Critics have said that the sanctions offered thus far have been weak and pointed out that Russian stocks have rallied this week. The Micex Index closed up 4.1 percent on Tuesday, with the RTS Index also up 4 percent.
According to reports, analysts suggested that the markets were calmed by Putin’s claims that Russia did not seek any more territory outside of Crimea.
Carney on Tuesday dismissed suggestions that the stock market rise showed that the sanctions were seen as ineffective.
“I think it's down for the year, and I think the ruble has lost value,” said Carney. “And I think that the long-term effect of actions taken by the Russian government, in clear violation of the United Nations charter, in clear violation of its treaty commitments, that are destabilizing and illegal, will have an impact on their economy all by themselves.”
“They will also incur costs because of the sanctions that we and the EU have imposed, and there will be more actions taken under the authorities that exist with the two executive orders that the president has signed,” he added.