Tag Archives: Finance

NEWSLINK Brookings Institution: The ruble currency storm is over, but is the Russian economy ready for the next one?

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Recent data show the Russian economy contracted 1.9 percent in the first quarter of 2015. In this article, Sergey Aleksashenko delves into the events that led to the downturn, and what we can expect for the rest of 2015.

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NEWSWATCH Wall Street Journal: The Putin Recession; Russia’s economy keeps shrinking, but the West won’t take advantage

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The Wall Street Journal editors address Russia’s economic crisis and the West’s apparent unwillingness to step up economic pressure. The Russian recession is expected to continue unfolding. An oddity of recent weeks has been the attempt to argue that Russia’s economy isn’t as awful as it looks. Then along comes Friday’s report that GDP fell 1.9% year-on-year in the first […]

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Russian Foreign Direct Investment Dropped 40% in 2014

File Photo of Outdoor Electronic Sign with Russian Exchange Data

(Moscow Times – themoscowtimes.com – May 19, 2015) Overseas investment by Russian companies fell to $56 billion last year, a 40 percent decline from 2013, even as China led a wider boom in foreign direct investment from emerging economies, according to a report by the United Nations Conference on Trade and Development (UNCTAD) released Monday. The figure means that Russia […]

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Poroshenko loyalists in parliament doubt Ukraine will declare technical default

Rada File Photo

KYIV. May 19 (Interfax) – The Petro Poroshenko faction in the Ukrainian parliament predict that the government will not make use of the right to declare a moratorium on the repayment of the external debt to commercial companies. “The law on the Cabinet’s right to impose a moratorium on the repayment of the external debt is putting additional pressure on […]

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What next for Russia’s economy and the ruble?

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(Business New Europe – bne.eu – Chris Weafer in Moscow, Senior Partner at Macro Advisory, which offers bespoke Russia-CIS consulting – May 19, 2015) If you left Russia for the last New Year holiday and did not return until the recent May holidays, and did not follow the news from or about Russia in the meantime, you would certainly be […]

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Russia’s Richest Billionaire: Impact of Sanctions Is Waning

Cash, Calculator, Pen

(Bloomberg – bloomberg.com – Ryan Chilcote, Yuliya Fedorinova – May 18, 2015) Russia’s richest man said international investors are coming back to the country and the impact of sanctions has peaked. “Now it’s getting clear that the situation is more politically stable or predictable,” Vladimir Potanin, who heads Russia’s biggest miner, OAO GMK Norilsk Nickel, said in an interview with […]

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Currency Crisis Leaves Russian Scientists With No Funds for Foreign Journal Subscriptions

Artist's Conception of Nanotechnology Components

(Moscow Times – themoscowtimes.com – Gabrielle Tétrault-Farber – May 13, 2015) After scientists across Russia lost access to thousands of academic journals on Tuesday due to the ruble’s sharp devaluation, Education Minister Dmitry Livanov vowed to restore access to academic publishing giant Springer, Russian media reported. Universities and research institutions across the country lost access to Springer due to a […]

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Russia’s road to deoffshorisation and capital amnesty still ‘under construction’

Hand Pulling Cash from Envelope

(Business New Europe – bne.eu – Artem Toropov, senior associate in the tax practice at law firm Goltsblat BLP – May 7, 2015) More than a year has passed since the Russian “deoffshorisation” reform was switched into “active” mode by the Russian president. 2014 was dominated with work on the new legislation – but the result, to many, was quite […]

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Dividend season opens and Russian companies are paying

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(Business New Europe – bne.eu – bne IntelliNews – May 6, 2015) It’s reporting season and some Russian companies are paying handsome dividends to their shareholders. Almost twice as much as emerging-market peers, in fact, relative to their stock prices, after the sudden ruble rout of last year bolstered exporters’ cash piles. Russian stocks have been performing well off the […]

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Russian Bank Lending Drops 60 Percent as Crisis Paralyses System

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(Moscow Times – themoscowtimes.com – May 6, 2015) The number of loans issued in Russia in the first quarter of this year fell by 58 percent compared to the same period in 2014, as the devaluation of the ruble, Western sanctions and sky-high interest rates hit the banking system, a report showed Tuesday. The tide is now slowly beginning to turn […]

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Foreign currency protests in Russia – a chance for the opposition?

Map of Russia and Russian Flag adapted from images at state.gov

While political demonstrations are on the slide, economic protests are on the rise in Russia. Can the two be united? (opendemocracy.net – Dmitry Florin – April 30, 2015) Dmitry Florin is an independent journalist based in Moscow, Russia. The Russian opposition is a broad church. Just as radical leftists hold their own marches, so do the liberals and the nationalists. […]

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Russian Economy May Be Stumbling Back To Its Feet

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(Oilprice.com – Andy Tully – May 3, 2015) The Bank of Russia has cut interest rates for the third time so far this year, reinforcing forecasts by some government ministers that the country’s economic woes are beginning to stabilize. The central bank cut its key rate on April 30 to 12.5 percent, a reduction of 1.5 points, and said it would […]

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NEWSLINK Reuters: Russia cuts key interest rate, hopes worst of crisis over

File Photo of Elvira Nabiullina at OECD Event, at Podium and On Large Video Screen

Russia’s central bank cut its main lending rate by 1-1/2 percentage points on Thursday, its third rate cut this year, a sign that it believes the worst of an economic crisis is over. The cut to 12.5 percent follows the rouble’s recovery in recent weeks after a dramatic decline last year as global oil prices fell and Western economic sanctions […]

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NEWSLINK Wall Street Journal: Russian Assets Regain Appeal for Investors. The country’s ruble, sovereign bonds, and stocks attract those seeking higher yields

St. Basil's Domes

Investors have taken Russia out of the penalty box. The ruble has gained 17.5% in 2015 against the U.S. dollar, after losing nearly half of its value in 2014, according to financial-data provider CQG. It has soared 46% from an intraday record low set in December. Russia’s stock index denominated in the ruble has soared 20% this year through Monday, […]

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Open economy should be created in Russia – Putin

File Photo of Outdoor Electronic Sign with Russian Exchange Data

ST. PETERSBURG. April 28 (Interfax) – Raising private investment for different economic sectors, including the defense industry, is one of the key paths for the development of the Russian economy in general, President Vladimir Putin has said. “Raising private investment is one of the general paths of economic development as a whole. It is one of the main points that […]

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NEWSLINK Forbes: Here’s How Much Russian Stock Values Have Eroded Since Sanctions

File Photo of Outdoor Electronic Sign with Russian Exchange Data

For Russia investors, timing was everything.  Those who bought on the bad news of last summer were hit with more bad news come the end of summer when the U.S. sanctioned Gazprom, Rosneft and Lukoil. Then the Russian Central Bank went into panic mode and raised interest rates to save the ruble. The market sensed that the bank was getting […]

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Strengthening of ruble due to growth of oil prices over – Yudayeva

Oil Wells File Photo

MOSCOW. April 22 (Interfax) – The strengthening of the ruble due to growth in prices for oil has ended, First Deputy Central Bank Governor Ksenia Yudayeva told journalists at the Forum for Financial Stability on Wednesday. “The strengthening of the ruble has ended, it has partially ended, what we saw was connected with the sharp movement upwards in prices for […]

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Russian Global Trade Plummets as Economic Crisis Deepens

Mercator Projection Satellite Image of Earth

(Moscow Times – themoscowtimes.com – Peter Hobson – April 21, 2015) Russia’s trade turnover with the outside world plunged 30.1 percent year-on-year in the first two months of 2015 as oil price falls, currency devaluation and tit-for-tat sanctions shook the Russian economy. The value of Russia’s international trade fell to $83.3 billion over January and February, according to data published […]

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Ruble Rebound Slows Russia’s Rampant Food Price Inflation

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(Moscow Times – themoscowtimes.com – Delphine d’Amora – April 21, 2015) The ruble’s rapid recovery in recent weeks has seen prices on some foods fall, easing months of spiraling inflation and softening one of the most widely felt blows of Russia’s economic crisis. All major retailers contacted by The Moscow Times last week said that the ruble’s rebound of some […]

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NEWSLINK CNBC: Why Russia is more confident: Finance Minister

Anton Siluanov file photo

Russia’s economy has been through a series of seismic shocks in the past year – but there are increasing reasons to be optimistic as the amount of money being pulled out of the country slows, according to the country’s Finance Minister, Anton Siluanov.

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Ukraine plays hard ball with private creditors

International Monetary Fund Logo Over Ukraine Flag

(Business New Europe – bne.eu – bne IntelliNews – April 20, 2015) Ukraine is ready to play hard ball in its bid to restructure $15.3bn in foreign debt, was the signal sent by Finance Minister Natalie Jaresko to corporate bondholders in Washington on April 17. The government wants to secure a $40bn bailout package assembled with the International Monetary Fund […]

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Russia Economy Recovering as Oil Reliance Eases, Dvorkovich Says

Arkady Dvorkovich file photo

(Bloomberg – bloomberg.com – David Tweed, Haslinda Amin – April 20, 2015) Russia’s economy showed signs of recovery in the first and second quarters amid a declining dependence on oil, Russian Deputy Prime Minister Arkady Dvorkovich said. “Oil prices are not as important to the Russian economy as before,” Dvorkovich told Bloomberg TV Monday at the World Economic Forum on […]

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Weak Russian Economic Data Blunt Putin’s Optimism

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(Moscow Times – themoscowtimes.com – Peter Hobson – April 20, 2015) The ruble slumped 4 percent and Moscow-listed stocks fell on Friday after official data showed that Russia’s economy contracted sharply in the first quarter of this year. The data, which showed a deep decline in real wages and consumer spending, came a day after President Vladimir Putin told Russians […]

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Moody’s: Russian inflation to peak at 17%-18% in Q2 2015, drop below 10% by mid-2016

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MOSCOW. April 15 (Interfax) – Moody’s Investors Service expects Russian inflation to peak at 17%-18% in the second quarter of 2015 and to drop below 10% by mid-2016 as the impact of the ruble’s depreciation fades, Moody’s said in a report on Russia’s banking sector in 2015. “Therefore Central Bank of Russia (CBR) is likely to loosen monetary policy on […]

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Eastern Ukraine returns to the ruble

Map of Ukraine, Including Crimea, and Neighbors, Including Russia

(Business New Europe – bne.eu – Graham Stack in Kyiv, Mari Bastashevski in Donetsk – April 15, 2015) The Russian ruble is gaining ground against the hryvnia across rebel-held parts of East Ukraine’s Donbas region, 19 years after Kyiv introduced the national currency to end the country’s membership of the ruble zone. As Eastern Ukraine heads towards becoming a frozen […]

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NEWSLINK Reuters: Russia must review participation in international funds – finance minister

Anton Siluanov file photo

Russia must review its participation in international financial organisations because the country is paying too much in fees, Finance Minister Anton Siluanov said on Wednesday. http://www.reuters.com/article/2015/04/15/russia-crisis-internationalfunds-idUSR4N0X602D20150415

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Putin’s Mideast Gains Trump $27 Billion Loss From Iran Agreement

Middle East Map

(Bloomberg – bloomberg.com – Henry Meyer, Stephen Bierman – April 14, 2015) As Russian President Vladimir Putin has shown in Crimea and eastern Ukraine, he’s willing to take an economic hit to expand his political influence. He’s taking the same approach with Iran. Lifting sanctions and allowing Iranian oil onto global markets would threaten to deepen the plunge in crude […]

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Russia Sees Further Drop in Capital Outflows as Economy Adjusts

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(Bloomberg – bloomberg.com – Olga Tanas, Anna Andrianova – April 14, 2015) Russian capital outflows will slow further as bonds and the ruble stage a comeback following a sell-off last year, Finance Minister Anton Siluanov said. Net outflows will slow to $15 billion in the second quarter after a “sharp decline” in the previous three months, bringing the total for […]

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Russian Capital Flight Slows to $32.6 Billion in First Quarter

Cash, Calculator, Pen

(Moscow Times – themoscowtimes.com – April 10, 2015) Net capital outflow from Russia was $32.6 billion in the first quarter of the year, down from $72.9 billion in the previous three months, suggesting that panic over Russia’s economic crisis has receded, data published this week by the Central Bank showed. Capital flight from Russia nearly tripled in 2014 from the […]

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Almost all net capital outflow from Russia in Q1 due to debt payments – CBR

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MOSCOW. April 13 (Interfax) – The private sector net capital outflow from Russia of $32.6 billion in the first quarter of 2015 was almost completely due to payments on the foreign debt of the private sector, which amounted to $29.8 billion, the Central Bank of Russia (CBR) said in comments released by its press service. Another $2.9 billion of the […]

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NEWSLINK Forbes: Ukraine Debt Rating Now Super-Duper Junk

Map of Ukraine, Including Crimea, and Neighbors, Including Russia

On Friday, Standard & Poor’s cut Ukraine’s long term foreign debt rating to CC from CCC-.  The rating of CC is one notch above C, which is used when a debtor is in the process of filing for bankruptcy protection. Standard & Poor’s kept Ukraine’s short-term foreign credit rating at C with a negative outlook. http://www.forbes.com/sites/kenrapoza/2015/04/10/ukraine-debt-rating-now-super-duper-junk/

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Moscow Times: Ruble Hits New 2015 Highs in World’s Best Currency Rebound

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(Moscow Times – themoscowtimes.com – Howard Amos – April 8, 2015) The Russian currency strengthened rapidly Wednesday as a recent rally driven by greater confidence in the ruble and easing international tensions overpowered the downward pressure of a sliding oil price. The ruble jumped over 3 percent in morning trading to 53.4 against the U.S. dollar before weakening slightly to […]

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No artificial liquidity crunch – Nabiullina

File Photo of Elvira Nabiullina at OECD Event, at Podium and On Large Video Screen

MOSCOW. April 7 (Interfax) – There’s no artificial deliberate liquidity crunch in Russia, Elvira Nabiullina, head of the Central Bank, said. “There’s no artificial liquidity crunch,” she said. She said the ruble was strengthening due to the stabilization of oil prices, and end to peak foreign debt repayments and a high key rate. “Some people have described the ruble’s strengthening […]

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NEWSLINK New York Times: Greece Should Be Wary of Mr. Putin

Ancient Temple Ruins in Greece with Tourists

The Greek government is facing a series of daunting challenges. It has to come up with money to pay off maturing debts, revive its devastated economy and renegotiate its loan agreements with other countries in the eurozone. Given those difficulties, it might be tempting — though misguided — for Prime Minister Alexis Tsipras to seek financial or other support from […]

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Russia takes over presidency of BRICS group

File Photo of Flags of BRICS Nations and BRICS Logo from Past Summit

(Business New Europe – bne.eu – bne IntelliNews- April 3, 2015) Founding a $100bn currency reserve pool, launching the New Development Bank, and progress toward the peaceful settlement of world conflicts should be the hallmarks of Russia’s presidency of the BRICS grouping of emerging powers, the country’s leadership pledged after taking the helm on April 1. “The Russian presidency will […]

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Ruble whipsaws top forecasters as worst currency becomes best

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(Bloomberg – bloomberg.com – Ksenia Galouchko – MOSCOW, April 6, 2015) For one of the toughest jobs in financial markets, try predicting the ruble. As Russia’s currency went from the world’s worst performer to the best in the first three months of this year, it caught out even the most accurate forecasters. Oil’s drop to near a six-year low and […]

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Russia improves – but don’t get too carried away yet

Cash, Calculator, Pen

(Business New Europe – bne.eu – CONFERENCE CALL: Marcus Booth in London – April 1, 2015) Russia has experienced a “significant rally” in recent weeks, amid “wide acknowledgement” that the country has “significant financial cushions and liquidity buffers,” Andreas Kolbe of Barclays told attendees at the “EMTA Special Seminar “Russia/Ukraine: An Update” on March 26. At the panel session, hosted […]

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Moscow Times: Only 2% of Russians Concerned Over Ruble’s Collapse – Poll

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(Moscow Times – April 1, 2016) Only 2 percent of Russians count the ruble’s collapse among the most important issues facing their country, according to a recent survey by state pollster VTsIOM. When asked the question “Which problems do you believe are the most important for the country as a whole?” 21 percent of respondents chose “the economy,” 17 percent […]

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NEWSWATCH Moscow Times: Russia Has Ukraine’s Economy in a Choke Hold

International Monetary Fund Logo Over Ukraine Flag

[“Russia Has Ukraine’s Economy in a Choke Hold” – Moscow Times – Josh Cohen – Mar. 31, 2015] Writing in The Moscow Times, Josh Cohen considers Russia’s impact on Ukraine’s economy, including within the context of Russia’s impact on efforts to restructure Ukraine’s debt in connect with bailout financing. … to paraphrase Clausewitz, while the Minsk II cease-fire continues to hold in […]

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NEWSWATCH AP: American farmer among the winners in sanctions-hit Russia

Eurasia Map

[“American farmer among the winners in sanctions-hit Russia” – AP – James Ellingsworth – Apr. 1, 2015] AP examines the impact of Ukraine-related Western sanctions on Russia, such as increased prices for some farmers, instability in international projects, and evolving energy relations between Russia and China. The impact of sanctions, and a Russian embargo, on agriculture is apparently mixed. Russia’s ‘counter-sanctions’ ban on food imports […]

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Russian money infects London

File Photo of British Parliament Building, Big Ben, Thames, adapted from image at loc.gov

(Business New Europe – bne.eu – Ben Aris in Moscow – March 31, 2015) Walk down Oxford Street into Knightsbridge and the signs “we speak Russian” are pasted inside the windows of many high-end shops. Bishops Avenue in north London has become one of the world’s most expensive addresses and is home to several oligarchs in exile. The lingua franca […]

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IMF ties itself into knots over status of Russia’s loan to Ukraine

International Monetary Fund Logo Over Ukraine Flag

(Business New Europe – bne.eu – Ben Aris in Moscow – March 27, 2015) A confusing argument has broken out over the crucial question of whether Ukraine’s $3bn worth of bonds held by Russia and due in December are “official” debt or not. The answer is important because if the bonds are “official” and Ukraine doesn’t pay them, the International […]

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NEWSWATCH AFP: Ruble gain brings hope to Russian economy

Cash, Calculator, Pen

[“Ruble gain brings hope to Russian economy” – AFP – March 30, 2015] AFP covers variations in the value of the ruble amidst Russia’s ongoing economic crisis. It has been a torrid time of late for the Russian economy, as the fallout from Ukraine and tumbling oil prices have plunged the country into financial crisis. However, an unexpected recent rebound by […]

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Sanctions and Regime Survival

Tower and Building Inside Kremlin

(PONARS Eurasia – ponarseurasia.org – Mark Kramer, Director, Cold War Studies Program, and Senior Fellow, Davis Center for Russian and Eurasian Studies, Harvard University – March 11, 2015 – article also appeared at ponarseurasia.org/article/sanctions-and-regime-survival) Some debates never die; they just get replayed. After the Soviet Army invaded Afghanistan in late December 1979, the United States imposed economic sanctions against the USSR. The Russian Federation since […]

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NEWSLINK Washington Post: A year into a conflict with Russia, are sanctions working?

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When it comes to inflicting economic pain on Russia, the Kremlin may be doing a better job than Western sanctions. Just don’t tell that to the Russian people, who overwhelmingly blame the West for a deepening recession that has parts of central Moscow starting to look like a ghost town. Prices are soaring. The ruble is dropping. And Russian living […]

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NEWSLINK TASS: Russia’s 200,000 employed senior citizens worry they may lose old age pension

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MOSCOW, March 26. /TASS/. Russian Labor and Social Protection Ministry’s idea of stripping employed senior citizens whose annual remuneration is one million roubles (about $16,500) or more of their old age security pension has sparked a debate in Russian society. In the context of Russia’s modern realities one million roubles is a sum enough to buy an average class car, […]

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