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Tag Archive for Finance

The oil price is all that matters regarding Russia

Oil Well file photo

(Business New Europe – bne.eu – Chris Weafer – December 19, 2014) Chris Weafer is Senior Partner at Macro-Advisory, which offers bespoke Russia-CIS consulting. The key takeaway concerning the economy and the ruble from President Valdimir Putin’s press conference on December 18 is that the Kremlin does not have any strategy or plan to try

How does the 2014 ruble crisis compare with the 1998 vintage?

File Photo of Cash, Coins, Line Graph

(Business New Europe – bne.eu – Ben Aris in Moscow – December 17, 2014) The ruble’s crash on December 15 from RUB53 to nearly RUB80 vs the dollar has caused many commentators to compare this crisis to Russia’s financial collapse in 1998. Is Russia really going into a full-scale meltdown for the fourth time in

Russian Media Downplay Extent of Ruble Crisis

File Photo of Cash, Coins, Line Graph

(Moscow Times – themoscowtimes.com – Howard Amos, Ivan Nechepurenko – December 17, 2014) While the ruble pinballed erratically between 58 and 80 per U.S. dollar on Tuesday, making headlines around the world, Russia’s state-run media have attempted to take a soft and conciliatory stance on the home currency’s woes. A news bullet by state-owned Channel

What awaits Russia’s economy in 2015 after ruble collapse?

Oil Well file photo

(Russia Beyond the Headlines – rbth.ru – Konstantin Korishchenko, special to RBTH – December 17, 2014) Konstantin Korishchenko is head of the stock market and financial engineering department at the Finance and Banking Faculty of the Russian Presidential Academy of National Economy and Public Administration, and a former deputy chairman of the Russian Central Bank.

Medvedev says ruble ‘undervalued’ as slide slows

File Photo of Dmitry Medvedev with United Russia Logos Behind Him

(Business New Europe – bne.eu – bne IntelliNews – December 17, 2014) Russian Prime Minister Dmitry Medvedev called the ruble undervalued at a meeting on December 17 with the top officials of the government, the central bank and heads of Russia’s largest exporters. He said that regulation of the currency market would remain based on

Picking through the ruble

Russian Central Bank file photo

(Business New Europe – bne.eu – MOSCOW BLOG: Ben Aris in Moscow – December 16, 2014) The Russian ruble crashed again on December 15, in the biggest fall since the last big crisis in 1998. The Central Bank of Russia (CBR) belatedly stepped in with a huge interest rate hike overnight, but it has been

Fears of Capital Controls Grow as Russia’s Economy Goes Haywire

File Photo of Cash, Coins, Line Graph

(Moscow Times – themoscowtimes.com – Howard Amos – December 17, 2014) The possible implementation of capital controls in Russia came a step closer Tuesday as the authorities appeared to be running out of options to stem the country’s dramatic currency collapse. The ruble defied an emergency interest rate rise of 6.5 percentage points announced overnight,

Yavlinsky calls for returning Kudrin to government

Alexei Kudrin file photo

(Interfax – December 13, 2014) Grigory Yavlinsky, a founder of the Yabloko party, calls for replacing the Russian government and appointing former Finance Minister Alexei Kudrin a new prime minister or first deputy prime minister with a special mandate. “We believe the government needs to be changed – whether it’s going to be the entire

Business New Europe: “Better late than never?”

File Photo of Cash, Coins, Line Graph

(Business New Europe – bne.eu – MOSCOW BLOG: Ben Aris in Moscow – December 12, 2014) There is an obvious solution to help deal with Russia’s economic slowdown that is being exacerbated by the tumbling oil prices: do those reforms that should have been done ten years ago. It’s kind of obvious. But also just

Business New Europe: Flippant claim that ‘Russia is Spain’ is wide of the mark

Cash, Calculator, Pen

(Business New Europe – Henry Kirby in London – December 11, 2014) After months of downward pressure, the ruble went into near free-fall during the first week of December. From 36 to the dollar in early August, the Russian currency fell rapidly from 47 to 53 to the greenback in just a few days, amid

Business New Europe: Russia is running out of money – not…

File Photo of Cash, Coins, Line Graph

(Business New Europe – bne.eu – MOSCOW BLOG: Ben Aris in Moscow – December 11, 2014) There has been a spate of articles recently suggesting that Russia is on the edge of a complete economic meltdown. There was an article in the UK’s The Daily Telegraph suggesting that its economy has lost a third of

Putin offers Russian business ‘full’ offshore capital amnesty

Hands Opening Envelope Containing Cash

(Business New Europe – bne.eu – bne IntelliNews – December 4, 2014) Russian President Vladimir Putin has announced a complete capital amnesty, allowing businesses to repatriate offshore funds without fear of the consequences. “We need to finally turn the ‘offshore page’ in the history of our economy and country,” Putin told the federal assembly in

Crash Course: The Ruble’s Volatile Two Decades

File Photo of Cash, Coins, Line Graph

(RFE/RL – rferl.org – Carl Schreck – December 02, 2014) The Russian ruble’s sharp plunge this week, which saw it fall below 50 to the U.S. dollar, has revived the specter of the kind of currency crisis that Russians have suffered through repeatedly over the past 25 years. The ruble on December 1 took its

Interfax: Russian Investigations Committee drafts measures to slow down capital flight

File Photo of Cash, Coins, Line Graph

(Interfax – November 24, 2014) Russian Investigations Committee has prepared its own proposals allowing to “considerably slow down” the capital flight from Russia, the committee’s head Aleksandr Bastrykin has said, as reported by privately-owned news agency Interfax on 24 November. “We are so wealthy and powerful that we will be able to cope with problems

Ukraine Shrugged Off as Russia ETF Swells to Record

File Photo of Cash, Coins, Line Graph

(Bloomberg – bloomberg.com – Elena Popina – November 24, 2014) As oil fell into a bear market, the ruble traded at record lows and NATO said President Vladimir Putin is stoking conflict in Ukraine, bets on the biggest exchange-traded fund tracking Russian stocks surged to a record. Demand for shares in the Market Vectors Russia

Sanctions Affect Half Of Russia’s Banking Sector, Report Says

Cash, Calculator, Pen

(Moscow Times – themoscowtimes.com – November 19, 2014) Russian banks are the most vulnerable among the world’s large emerging market economies due to Western sanctions and near zero levels of economic growth, a Standard & Poor’s report released Wednesday said. Sanctions directly affect more than 50 percent of Russia’s banking sector, which is dominated by

Interfax: Russian central banker says economy can withstand lower oil price, sanctions

Elvira Nabiullina file photo

(Interfax – November 18, 2014) The head of the Russian Central Bank, Elvira Nabiullina, has said that the economy would retain stability if things go less than well, i.e. if oil prices averages 80 dollars per barrel and sanctions continue until the end of 2017. Speaking in the State Duma on 18 November, she added

Russia moves to free-sinking currency

File Photo of Cash, Coins, Line Graph

(Business New Europe – bne.eu – Ben Aris in Moscow – November 19, 2014) After controlling the ruble-dollar exchange rate for more than two decades to ease the pain of the transition to a free market, on October 9 the Russia’s central bank finally let the ruble go. The Russian currency is now a fully

Early shift to free-floating policy gives shelter to battered Russian ruble

File Photo of Cash, Coins, Line Graph

(Russia Beyond the Headlines – rbth.ru – Alexei Lossan, RBTH – November 17, 2014) Since the beginning of 2014 the value of the ruble has fallen by about 50 percent against the dollar and the euro, a slide most analysts attribute to low oil prices. In the end, Russia’s Central Bank decided to bring forward

Russian Capital Flight May Hit $130 Billion, Finance Minister Says

Anton Siluanov file photo

(Moscow Times – themoscowtimes.com – November 18, 2014) Capital outflow from Russia could grow to $130 billion this year, Finance Minister Anton Siluanov said Monday, news agency Bloomberg reported. The prediction brings the government’s expectations closer to that of the Russian Central Bank, which said on Nov. 10 that capital outflow could hit $128 billion

Profile: Elvira Nabiullina, Woman at Center of Russia’s Ruble Collapse

Elvira Nabiullina file photo

(Moscow Times – themoscowtimes.com – Howard Amos – November 15, 2014) Reaching the climax of a personal attack on Russia’s Central Bank chairwoman Elvira Nabiullina in a debate in the State Duma early last week, Communist deputy Vyacheslav Tetyokin did not hold back. Nabiullina, he said, was “the most expensive woman in the history of

Ruble Rout Intensifies as Russia’s Central Bank Limits Interventions

Russian Central Bank file photo

(Moscow Times – themoscowtimes.com – Howard Amos – November 5, 2014) The Russian ruble plunged when trading opened Wednesday as the Central Bank announced it would cap the amount of foreign reserves it spends to defend the currency. The ruble fell to historic lows, diving to 44.98 against the dollar and passing the 56 euro

In Ukraine hope springs eternal

Ukraine Map and Flag

(Business New Europe – bne.eu – CONFERENCE CALL: Ben Aris in Kyiv – October 31, 2014) Two days after a crucial parliamentary election that put the seal on Ukraine’s latest political transformation, SP Advisors, a leading local investment firm, held its first investment conference and invited international investors to Kyiv to debate the Eastern European

Safe-Deposit Box Craze Lays Bare Ukraine Woes After Vote

File Photo of Cash, Coins, Line Graph

(Bloomberg – bloomberg.com – Daryna Krasnolutska – October 29, 2014) Wary of banks and alarmed by armed conflict around her parents’ town, Daria Demianenko joined Ukraine’s rush to an old-fashioned way of squirreling away cash. More commonly known as a home for fancy jewels and ill-gotten gains, safe-deposit boxes are swallowing a growing chunk of

Blowing $24 Billion on Ruble Spurs Free-Float Bet

File Photo of Cash, Coins, Line Graph

(Bloomberg – bloomberg.com – Vladimir Kuznetsov – October 29, 2014) The ruble’s persistent weakening in the face of $24 billion of interventions is stoking speculation the Bank of Russia will accelerate its switch to a free float. The currency fell to a record for a sixth day today, losing 0.6 percent to 42.7410 per dollar

Russia Sanctions Update series

Truck at Russian Border Crossing

Paul Backer, an American attorney based in Moscow, recently has offered the following original contributions to the JRL on the subject of sanctions and the response by business and legal counsel. Backer, pbacker@skalalaw.com, is with Skalaw Law, online at skalalaw.com. Part I: Russia sanctions: implementing client sanctions policies – Sept. 26, 2014 Part II: Russian companies’ failures

RIA Novosti: Putin Limits Foreign Capital’s Participation in Russian Media: Government

File Photo of Cash, Coins, Line Graph

MOSCOW, October 15 (RIA Novosti) – Russian President Vladimir Putin has signed a law reducing the possible share of foreign stockholders in the Russian media to 20 percent, says the corresponding document published on the Russian government’s official legal information web portal Wednesday. “Unless otherwise stipulated by an international treaty … a Russian legal entity

Russians Lose Faith in Banks as Ruble Falls and Sanctions Bite

VTB Bank Facade file photo

(Moscow Times – themoscowtimes.com – Delphine d’Amora – October 16, 2014) Consumer confidence in Russia’s financial system is falling, with half of Russians saying they don’t trust banks and are using such services less, in a troubling signal for a system under pressure from Western sanctions and more sensitive than ever to outflows of depositors,

Russia Can’t Be Blackmailed Over Ukraine, Putin Says

Map of Commonwealth of Independent States, European Portion

(Bloomberg – bloomberg.com – October 15, 2014) It’s futile for the U.S. and its allies to “blackmail” Russia over the Ukraine crisis, President Vladimir Putin said in a newspaper interview. Russia’s partners should remember the risks involved in disputes between nuclear powers, Putin said. He accused Barack Obama of adopting a “hostile” approach in naming

Gref: Central Bank ruble policy ‘optimal’

Russian Central Bank file photo

MOSCOW. Oct 14 (Interfax) – The Central Bank of Russia’s ruble exchange rate policy is “optimal,” Sberbank of Russia (MOEX: SBER) President and CEO German Gref said. “The policy that the Central Bank is pursuing is, in my view, optimal from the standpoint of managing the exchange rate. The economy is self-tuning, because the processes

Fears of a Russian credit crunch greatly exaggerated, say analysts

File Photo of Cash, Coins, Line Graph

(Business New Europe – bne.eu – October 14, 2014) On paper, Russian companies have huge foreign debts, and no way of refinancing them because sanctions effectively close Western capital markets to Russian borrowers. But with much of Russian corporate foreign debt in fact hidden equity investments from offshore zones, the figures seem much worse than

Russia signs raft of deals with China

China Map

(Business New Europe – bne.eu – October 14, 2014) Russia and China signed a raft of 40 agreements encompassing trade, energy, finance and technology, following a meeting between Russian prime minister Dmitry Medvedev and his Chinese counterpart, Li Keqiang, on October 14 in Moscow. The agreements demonstrate how Russia is looking for other options, after

Russia Can’t Escape Historical Retrospection in Crisis

File Photo of Cash, Coins, Line Graph

(Blooomberg – bloomberg.com – Ye Xie and Elena Popina – October 9, 2014) As Russia starts burning through foreign reserves in a bid to defend the ruble, flashbacks to the country’s 1998 devaluation and default are inevitable. While the government is in a much stronger position today to fend off the crisis than it was

RIA Novosti: Russia Needs to Create Domestic Credit System to Survive Sanctions: Presidential Aide

File Photo of Stack of Credit Cards, adapted from image at fdic.gov

MOSCOW, October 7 (RIA Novosti) – Russia needs to establish a system of domestic credit and improve the efficiency of public administration, so that the economy could successfully develop amid Western sanctions, Russian Presidential Aide Sergei Glazyev said Tuesday. “If we want to survive the war that is being waged against Russia, we need to

Moscow Times: Who Is Benefiting From West-Russia Sanctions War?

Truck at Russian Border Crossing

(Moscow Times – themoscowtimes.com – Alexey Eremenko – August 6, 2014) The recent Western sanctions, the harshest in decades, are meant to stun Russia’s economy. But one person’s loss is another one’s gain – and this is also true for companies and countries in a globalized world. Following the U.S.’s example, the European Union last

Ukraine update

Ukraine Map and Flag

(Business New Europe – bne.eu – Tim Ash, Standard Bank – July 24, 2014) What is now clear on the ground is that Ukraine is at war, and with significant casualties suffered now by both sides on a daily basis – tens of lives lost almost daily now. The conflict is also causing very significant

Russia’s capital flight hits 75 billion dollars

File Photo of Cash, Coins, Line Graph

(Interfax – Moscow, July 9, 2014) According to an assessment by the Central Bank of Russia, the net export of capital by banks and companies from the Russian Federation in the first half of 2014 was 74.6bn dollars. That is 120 per cent higher than in the first half of 2013 (33.7bn dollars), the Bank

RIA Novosti: Ukrainian Crisis Harmless for Russian Financial System – Central Bank

Russian Central Bank file photo

MOSCOW, July 8 (RIA Novosti) – The consequences for the Russian financial system if the crisis in Ukraine further escalates will be limited, according to a review of financial stability conducted by the Central Bank of Russia (CBR) for the fourth quarter of 2013 and the first quarter of 2014. “The possible direct consequences for

How Bulgaria’s Bank Run Affects Ukraine’s European Dream

EU Map

(Bloomberg – bloomberg.com – Ian Wishart, Elizabeth Konstantinova – July 3, 2014) Joining the European Union was meant to give Bulgaria a fresh start. Try telling that to Anna Dimitrova. “Bulgaria didn’t gain from the EU as much as it could have, because it’s mismanaged by corrupt politicians,” said Dimitrova, a law student, in central

Why Putin Is in Trouble With 86% Approval

Vladimir Putin file photo

(Bloomberg – bloomberg.com –  Evgenia Pismennaya, Henry Meyer, Brad Cook – June 27, 2014) One month he wins the Olympics and kudos from world leaders. The next he grabs Crimea and gets kicked out of their most exclusive club. Now he’s facing a recession with few tools to fight it save the public’s love. Even

Corporate bondholders fret as oligarchs suffer under Ukraine crisis

File Photo of Cash, Coins, Line Graph

(Business New Europe – bne.eu – Nick Kochan in London – June 20,2014) Ukraine’s security crisis is hitting bond investors in some of the country’s largest companies. A combination of the deteriorating economic situation, falling currency, increased Russian import duties on Ukrainian goods and rising gas prices has meant big local firms are struggling to

Russians Paying Up to Turn Rubles Into Homes: Mortgages

File Photo of Cash, Coins, Line Graph

(Bloomberg – bloomberg.com – Lyubov Pronina – June 4, 2014) Denis Ichetkin’s decision to get a mortgage for a one-bedroom apartment on the outskirts of Moscow in late January couldn’t have been better timed, he said. The 30-year-old journalist and his wife Veronika secured a 15-year loan from VTB Group with a 12 percent interest

Russia-China gas deal spells trouble for the dollar

China Map

(Business New Europe – bne.eu – INVISIBLE HAND – Liam Halligan in London, Editor-at-Large of BNE – May 28, 2014) The St Petersburg International Economic Forum (SPIEF), now in its 18th year, was less well attended than usual. The absence of various US and Western Europe CEOs, responding to pressure from their governments following sanctions

Interfax: Visa, MasterCard to continue operating in Russia – Siluanov

File Photo of Stack of Credit Cards, adapted from image at fdic.gov

(Interfax – May 20, 2014) The payment systems Visa and MasterCard will continue operating in Russia, Finance Minister Anton Siluanov told Interfax on Tuesday. “We can’t abandon these systems since over 90 percent of those who use payment systems work with them,” he said. He did not say how the problem would be resolved with

Medvedev Orders Bank Chiefs to Reveal Personal Assets in Corruption Battle

VTB Bank Facade file photo

(Moscow Times – themoscowtimes.com – May 13, 2014) Prime Minister Dmitry Medvedev has ordered the heads of Russia’s two largest banks – state-owned Sberbank and VTB – to report their income, expenses and assets as part of an annual anti-corruption checkup. Sberbank’s German Gref, a former economic development minister, and VTB’s Andrei Kostin were among

Visa and MasterCard Cling to Russia Despite $3.8 Billion Blow

File Photo of Cash, Coins, Line Graph

(Moscow Times – themoscowtimes.com – Diana Kulchitskaya – May 7, 2014) Visa and MasterCard will hold fast to Russia despite a new law that forces them to pay over $3.8 billion as a security deposit to the Central Bank. Both international firms consider the measures taken as too severe and think that they will not

U.S. Drip of Sanctions Risks Putin Backlash

Portion U.S. Treasury Department Building Facade, North Side, with Sculpture of Alexander Hamilton

(Bloomberg – bloomberg.com – Indira A.R. Lakshmanan, Ilya Arkhipov and Kasia Klimasinska – April 29, 2014) The latest U.S. penalties against Vladimir Putin’s inner circle may provoke the Russian president into escalating the Ukraine crisis without crippling key sectors of his nation’s economy. The sanctions imposed by the Obama administration yesterday on seven officials and

Russian Billions Scattered Abroad Show Trail to Putin Circle

File Photo of Man Placing Stack of Large Bills into Inside Pocket of Suitcoat

(Bloomberg – bloomberg.com – Henry Meyer, Irina Reznik – April 28, 2014) Outside a Moscow stadium one night in 2006, deputy central bank chief Andrei Kozlov was walking to his car after playing soccer when two men opened fire, pumping bullets into his head and neck and killing his driver. Days before the murders, the

RIA Novosti: Proportion of ‘Grey Capital’ Outflow from Russia Reached 20%-40% in 2012-2013 – Medvedev

Dmitry Medvedev file photo

MOSCOW, April 22 (RIA Novosti) – The proportion of “grey capital” outflow from Russia in 2012-2013 reached 20 percent to 40 percent, Russian Prime Minister Dmitry Medvedev said Tuesday during his annual report in the country’s lower house of parliament. “One of the forms of outflow comes from those who are looking for more attractive

Capital Flight From Russia Expected to Reach $70-80B

File Photo of Cash, Coins, Line Graph

MOSCOW, April 21 (RIA Novosti) – The Russian Finance Ministry has forecast this year’s capital outflow from Russia as reaching $70-80 billion, the director of long-term planning at the ministry said Monday. “We are certain that it won’t jump to $100 billion this year. A more reasonable estimate would be around $70-80 billion,” Maxim Oreshkin

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