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Post by TsarSamuil on Nov 10, 2014 17:41:45 GMT -5
Putin: Ruble’s ‘speculative jumps’ to stop in near future.
RT.com
November 10, 2014 08:20
The sharp depreciation of the Russian currency is purely speculative and has nothing to do with fundamental economic factors, Russian President Vladimir Putin said at the APEC summit in Beijing.
“We are now seeing speculative jumps of the ruble, but I think that it should stop in the near future, given the actions that the Central Bank is currently taking in reply to the actions of speculators,” said Putin to the Business summit at APEC Forum.
“The events we are seeing now in Russia have absolutely nothing to do with the fundamental economic reasons and factors,” he added.
The ruble was quick to reflect Putin’s comment, with the currency rising against both the dollar and euro at the Moscow Exchange. It gained 1 ruble against the USD to trade at 45.7 and settled at 57 against the euro at 11am Moscow time.
Putin also confirmed that Russia will not introduce capital controls, as the authorities can manage the situation with the reserves they have.
“It’s important that our basic parameters on foreign exchange reserves and the balance of payments remain at a good level. It allows us to control the situation without additional extraordinary measures,” Putin said.
The Central Bank of Russia (CBR) tactics are reasonable and should bring results soon, the president said, adding that it will stick to a policy of inflation targeting. He also said that the country’s monetary authorities were ready to add more currency to the market to balance the ruble.
At the end of October the Central Bank of Russia raised its key interest rate by 150 basis points to 9.5 percent. That was seen as an attempt to support the ruble that was dramatically falling due to lower oil prices, the crisis over Ukraine, and sanctions.
Going away from the policy of regular currency interventions and moving the ruble closer to a free-float is another big factor. Experts say it’ll help the ruble settle at a fair market value and save Russia’s reserves. In October alone Russia spent about $30 billion of its reserves to balance the currency.
The bank has also enacted a new market tool, a currency repo or repurchase agreement that will provide up to $50 billion by the end of 2016. It allows for balancing of the ruble without using reserves.
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Post by TsarSamuil on Nov 22, 2014 11:05:40 GMT -5
Russian ruble continues recovery, as oil back to $80. RT.com November 21, 2014 13:06 The Russian ruble continued its fight back on Friday to move above 46 against the US dollar, as the price of Brent crude slid over the $80 per barrel threshold. The US dollar has fallen to 45.62 rubles Friday at 3PM Moscow time on the Moscow Exchange. The euro has fallen to 56.69 rubles. The official rate set by the Central Bank of Russia (CBR) for November 22 stands at 45.79 rubles against the US dollar and 57.43 against the euro. The recovery comes as the price for benchmark Brent crude has bounced back to $80 per barrel for the first time since November 13. The OPEC meeting next week is expected to be crucial, as member states will decide whether to cut production to support oil prices. Another factor supporting the currency is the CBR decision to let the ruble float, Sergei Kozlovsky, head of analytics at Grand Capital, wrote in an e-mail. It significantly reduced speculative activity in the domestic market and contributed to strengthening of the ruble against the dollar and euro. The regulator also said it would be ready to intervene at any moment, should it feel there’s a threat to financial stability, which gives market players much less room for speculation. The increase in demand for rubles in the new tax period has also caused positive changes in the exchange rate. Analysts say that the currency market is maintaining growth rates that reflect the increased demand for domestic currency and the current tax period should support the ruble after a long break. |
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Post by TsarSamuil on Nov 25, 2014 18:00:49 GMT -5
Russia loses $140bn with sanctions and falling oil prices – Finance Minister.
RT.com
November 24, 2014 12:47
Russia is losing around $40 billion a year due to Western sanctions, but they are not as critical to the economy as lower oil prices, which add $90-100 billion in losses, says Russian Finance Minister Anton Siluanov.
"We lose about $40 billion a year because of the political sanctions and around $90-100 billion a year due to the 30 percent reduction in oil prices," RIA quotes Siluanov speaking Monday at the International Financial and Economic Forum.
Lower investment and foreign loans along with capital outflow, estimated at $130 billion this year, are the key components of the loss, Siluanov explained.
Siluanov believes the decline in oil prices has a more significant impact on the Russian economy than the international sanctions.
"If we talk about the consequences of geopolitics, of course, they are important for us," he said. However, he added that "it is not as critical for the course, and even for the budget, as the prices of goods exported by us."
Talking about the ruble’s depreciation, Siluanov said that fluctuating oil prices should serve as a principal indicator of the ruble’s exchange rate amid a period of high volatility.
"The price of oil has fallen by 30 percent since the beginning of the year. Incidentally, the ruble has weakened by the same 30 percent. When people ask me - listen, you're the Minister of Finance, what’s the ruble rate going to be? It is impossible to answer because there are a lot of factors. I say, look at oil prices. The behavior of the ruble will depend on them," said Siluanov.
The price of Brent crude, which is used to calculate the price for Russian Urals blend, has fallen by 30 percent to about $80 a barrel since the end of June; its lowest price for four years.
According to the International Energy Agency, the total supply of oil on the world market in October increased by 35 thousand barrels to 94.2 million (2.7 million barrels more than in October 2013). In the same period, the average daily volume of oil supplies by OPEC countries in the world market amounted to 30.6 million barrels.
OPEC countries are also adding to the oversupply as they’ve been exceeding their quota of 30 million barrels per day for the last six months.
According to IEA experts, the decline in oil demand from China, world’s second largest oil consumer, and rising oil production in the US will lead to a sharper decline in prices in early 2015.
On November 27, OPEC leaders will meet in Vienna to decide whether to shore up oil prices by cutting output.
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jna
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Post by jna on Dec 2, 2014 19:54:20 GMT -5
Today RUB has reached another historical low - 54.3 RUB per USD.
A classical demonstration of the so-called "Dutch disease", if I ever saw one, when the national currency exchange rate is directly correlated with oil prices for oil-based economies.
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Post by TsarSamuil on Dec 3, 2014 20:44:41 GMT -5
Very worrying  |
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Post by TsarSamuil on Dec 4, 2014 14:40:14 GMT -5
Putin's 2014 Federal Assembly address in full. RT Dec 4, 2014 Russian President Vladimir Putin is addressing the Federal Assembly - both houses of parliament, the cabinet and other dignitaries - outlining his stance on his policies for the coming year. ------------ ‘Putin made perfectly clear that Russia won’t be bullied by West’ RT.com December 04, 2014 15:23 The West was hoping that sanctions and the falling ruble would force Russia to shift its policy, but Putin made it clear during his Federal Assembly address that Russia will continue its course, Mark Sleboda of Moscow State University, told RT. RT: Some strong words yet again from the Russian president. What kind of reaction can we expect from the West? Mark Sleboda: We can expect more of the same. These are not new words, they are just the reiteration that Russia will continue the course that it is not deterred by sanctions, it is not deterred by the buildup of NATO forces on its border, and it is not determined by harsh rhetoric from the West. Russia will stay the course and it will not change its foreign policy or sense of national interests because of Western aggression in either economic or military form against it. RT: President Putin has said that sovereignty is important for Russia and its Western partners should realize that. Do you think that is likely to happen? MS: Of course no. I think Putin said it ironically for rhetorical effect. The US, the West in general, stopped believing in sovereignty of nations back at the end of the Cold War. And we have seen that repeatedly: Iraq, Afghanistan, Libya, and Syria. Sovereignty is conditional in this new world order that was created when with aliment with Western foreign policy interests and hegemony. If you don’t have that aliment you don’t have sovereignty. This is what Russia is reacting against. RT: Also the president said that the West would have found some other way to hold Russia back, even if it wasn't for Ukraine's crisis. What do you make of that? MS: Not only would the West have found something else other than sanctions but the whole Ukraine crisis itself is not primarily directed at Ukraine, or the Ukrainian people which are of marginal interest to either the US or the EU, but at Russia and the reconsolidation of the Eurasian space and the economic union. That is the entire purpose of the Ukrainian crisis. RT: Putin accused the US of always meddling in the affairs of Russia's neighboring states. So what kind of reaction to this can we expect from the West? MS: Of course this won’t be accepted by the West and it is something that Western politicians, analysts don’t even acknowledge that it is happening and they never had during the whole spate of color revolutions all across the former Soviet space and most recently in Ukraine. We can’t forget that we saw US and EU politicians on the Maidan stage preaching to armed rioters that were calling for revolution against their country openly supporting them. That is an aggressive violation of Ukraine sovereignty and interference in its domestic political affairs. This whole putsch that happened, this whole propping up by the West, the arming of it - Russia is not going to forget it and Russia is not going to accept it.  From left: Russian President Vladimir Putin, Indian Prime Minister Narendra Modi, Brazilian President Dilma Rousseff, President of the People's Republic of China Xi Jinping and President of the Republic of South Africa Jacob Zuma during a meeting with the heads of state and government of BRICS member countries, which took place before the G-20 summit in Brisbane, Australia. (RIA Novosti)From left: Russian President Vladimir Putin, Indian Prime Minister Narendra Modi, Brazilian President Dilma Rousseff, President of the People's Republic of China Xi Jinping and President of the Republic of South Africa Jacob Zuma during a meeting with the heads of state and government of BRICS member countries, which took place before the G-20 summit in Brisbane, Australia. (RIA Novosti) RT: Just before he made the address, America's President lashed out at Putin for leading an aggressive and dated policy, saying that Putin “has been improvising himself into a nationalist, backward-looking approach to Russian policy that is scaring the heck out of his neighbors and is badly damaging his economy.” What do you think will be Obama’s reaction to that? MS: Not only the US but the EU, primarily Germany, were hoping that the sanctions, this most likely engineered collapse in global oil prices, the drop in the ruble, would force Russia to shift course. And Putin’s speech has made perfectly clear that Russia is not going to be bullied by the US and by Europe. Of course hearing the words “nationalist” and “aggressive” coming out from the US President who has military forces operating in a dozen countries around the world, and who had no respect for Ukraine sovereignty just a year ago when they were encouraging riots to overthrow the government, comes across as a little hypocritical. RT: The Russian president also reiterated that Moscow will search for new partners. Who might that be? And does this mean further strengthening of the BRICS on the international scene? MS: First of all, Putin is not addressing the West as partners anymore -we have to acknowledge this was said with a certain bit of irony- that is not the case anymore. It is not new partners. Russia has well developed relations particularly with the BRICS nations but also with the other countries around the world: Argentina, Iran, Indonesia, so on. It is the West that views itself as the world, and the West is not the World. And Russia has good relations with most of the rest of the world. |
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Post by jna on Dec 4, 2014 14:46:52 GMT -5
Very worrying This is basically 1998 all over again, but the whole thing is happening gradually. One lesson should be learnt well - never trust the RUB. Russian economics separely from oil exports, is a colossus with legs of clay, same as 14 years ago. Nothing has changed. |
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Post by TsarSamuil on Dec 4, 2014 16:06:28 GMT -5
Very worrying This is basically 1998 all over again, but the whole thing is happening gradually. One lesson should be learnt well - never trust the RUB. Russian economics separely from oil exports, is a colossus with legs of clay, same as 14 years ago. Nothing has changed. Russia limits American poultry imports. RT.com December 04, 2014 12:10 The import of US poultry into Russia has been temporarily banned by the sanitary regulator after the discovery of “harmful and “illegal” substances in the products. The temporary ban applies to all poultry and processed poultry products, Russia’s consumer hygiene authority, Rosselkhoznadzor, said in a statement Thursday. The restriction comes into force starting December 5. Russia has found “harmful residues and illegal substances coming from US poultry products, including the presence of antibiotics,” the statement says. Rosselkhoznadzor deputy head Nikolai Vlasov has contacted the US Department of Agriculture Food Safety and Inspection Service (FSIS) about the “gross violations of the requirements and regulations of the Customs Union,” which Vlasov says indicates the US isn’t properly controlling its products. The hygiene authority suggests the situation could be resolved when representatives meet American colleagues January 15-17 in Berlin at the Global Forum for Food and Agriculture 2015. On Wednesday the regulator banned the import of poultry from Germany and cattle from Italy, Hungary and Montenegro over bird flu fears. Pork imports from Europe have been banned since an outbreak of swine fever in January. Russia's agricultural watchdog has halted the import of vegetables from Albania starting from Dec. 8, over concerns it was acting as a conduit for EU imports to Russia via Belarus. On August 7, Moscow announced a one-year ban on food imports from Western countries, including poultry from the US. The ban was aimed at all countries that have levied sanctions against Russia over the Ukraine crisis. |
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Post by jna on Dec 4, 2014 16:36:34 GMT -5
But how fares the fracking? They can't keep this up? And it's just a bubble that will burst n then the yanks are out of options methinks. I have no clue, but I hope so. Some claim that the Saudis want to accelerate this with the low oil prices. |
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Post by TsarSamuil on Dec 4, 2014 17:35:15 GMT -5
But how fares the fracking? They can't keep this up? And it's just a bubble that will burst n then the yanks are out of options methinks. I have no clue, but I hope so. Some claim that the Saudis want to accelerate this with the low oil prices. Cutting Russia out of SWIFT banking system would mean ‘war’ – head of VTB. RT.com December 04, 2014 09:33 Excluding Russia from the global SWIFT banking transactions system is another form of sanctions and would mean “war,” said Andrey Kostin, head of VTB Russia’s second largest bank, adding that should it happen Russia has a “Plan B.” "In my personal opinion, if such a sanction is introduced it would mean war," Kostin said in an interview with Germany’s Handelsblatt newspaper. If Russian banks no longer have access to SWIFT, the American ambassador would leave Moscow the same day, he said. Kostin added that the banking system is highly dependent on the dollar and euro, and is the most vulnerable part of the Russian economy. However, he said Russia has an alternative should the SWIFT system be no longer available to Russia. Last month the Bank of Russia said it’s going to launch an alternative for financial transactions in May 2015. “There is much talk about the possibility of disconnection from SWIFT,” said VTB’s first deputy president Yuri Soloviev to Kommersant. He explained that 90 percent of all banking transactions are domestic that can be processed through alternatives to SWIFT. "Problems may occur with the remaining payments passing through foreign contractor banks, but we are actively working on possible solutions," he added, saying VTB hopes disconnection from SWIFT won’t happen. Earlier Andrey Kostin said that VTB is in talks with Sberbank on creating a new alternative to SWIFT. After the US and EU imposed sanctions on Russian banks there were fears that the next stage would be cutting Russia off from the SWIFT system. A call to shut down the SWIFT system in Russia first came from British Prime Minister David Cameron. A resolution in the European Parliament also included such a proposal. However, SWIFT representatives said that they will not switch Russia off the company’s services despite political pressure, adding it has "no authority" to make unilateral sanctions decisions. The company said it can happen only if the EU takes the decision. SWIFT is a global banking transactions system connected to more than 10,000 financial institutions in 210 countries. The daily turnover of payments made via SWIFT is around $6 trillion. Russia is the world’s second largest SWIFT customer after the US.  VTB Bank President and CEO Andrei Kostin (RIA Novosti/Aleksey Nikolskyi) |
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Post by jna on Dec 4, 2014 17:48:19 GMT -5
Saudis want to end fracking? It makes the USA less dependent of them. |
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Post by TsarSamuil on Dec 8, 2014 17:01:43 GMT -5
Sanctioned Russian banks begin testing national payment system next week.
RT.com
December 08, 2014 13:18
Russia’s Rossiya and SMP banks, which fell under Western sanctions, are among the eight lenders that will start testing the country’s new national payment system on December 15.
"The pilot project involves SMP Bank and Rossiya Bank, those for which the story is very critical and important. These are quite large banks,” the head of the Russian National payment system (NPS) Vladimir Komlev said in an interview with Rossiya 24 TV.
The move comes as a part of Russia’s ambitious initiative to move away from the Western dominance of its financial markets. Last month the Russian Central Bank said it would have its own international inter-bank payment system, an alternative to the global SWIFT network up and running by May 2015.
Gazprombank, Rosbank, Alfa Bank and Ural Bank for Reconstruction and Development are among eight other banks to join the pilot project. They were selected based on the size of business, location and technology platform, Komlev said.
Another bank involved in NPS testing is Russia’s second largest VTB. Recently its management has been vocal about the need to make Russia’s financial system more self-sufficient and ditch the US Dollar, Vedomosti reports.
The bank will soon connect to the NPS to test the system and be ready for any potential difficulties with payments in the future.
Komlev said the new system’s principle of operating will remain the same. The use of the existing formats will be more convenient for banks; they won’t have to reconfigure their software.
The latest version of the NPS technology is being tested by the Russian Openway Solutions company.
"The modules themselves are something unique, independent, only partly related to the Openway. Now all this belongs to us: our code, the knowledge of how the system is built, and its logic. We are able to develop it and provide support," said Komlev.
NPS was established in 2014 after a number of Russian banks were hit by US and EU sanctions. In March international payment systems Visa and MasterCard stopped servicing cards issued by the banks following the introduction of the sanctions.
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Post by TsarSamuil on Dec 12, 2014 16:44:20 GMT -5
Vid, rt.com/business/213431-russia-central-bank-ruble/Russian central bank hikes key interest rate to 10.5% to combat inflation, plunging ruble. RT.com December 11, 2014 10:38 The Russian Central Bank has increased borrowing costs to 10.5 percent to avoid a further rout of the ruble. The currency has lost more than 40 percent this year, and annual inflation is slated to reach 10 percent. Rising inflation spurred the aggressive rate hike. The bank sees inflation hitting 10 percent for 2014. As of December 8, inflation stood at 9.4 percent, according to the Central Bank. “Consumer prices continued to accelerate in November and the beginning of December. The increase in inflation and the expectation of devaluation creates a significant risk for inflation,” the bank said in a statement, released Thursday. The regulator increased the rate by 100 basis points, bringing this years’ total increase to 500 basis points. At the beginning of the year the benchmark interest rate was 5.5 percent. The bank’s board met for the last time in 2014, and said that it will continue to raise interest rates to curb rising inflation.  Source: Investing.com The bank only sees a chance of recovery in economy activity in 2017. It has revised its 2014 growth forecast to 0.6 percent. Russia's slowed growth has been complicated by the fast slide of its currency, the ruble, which has lost more than 40 percent against major hard currencies this year. The ruble has so far reacted neutrally to the bank's decision, only dropping about 0.5 percent at 14:00 MSK, with the ruble trading 55 per USD and nearly 69 to the euro.  @schuldensuehner Bank Of #Russia Raises Interest Rates. Ups Key Rate By 100 Bps To 10.5%. Ruble little changed, now 55.13  Even though Russia has the world's third largest foreign currency reserves at just over $418 billion, it is at a four-year low and $100 billion less than this time last year. The Ukraine crisis and massive capital outflow have forced the bank to spend over $70 billion to prop up the ruble this year. 'Close to zero growth' In 2015-2016, the Central Bank forecasts close to zero annual growth, a major revision from just September, when it predicted economic growth of 1 percent in 2015 and 1.8-2 percent in 2016. However, this forecast was based on oil prices recovering to $100 per barrel. Brent crude is currently trading under $65 per barrel. Low oil prices threaten the Russian economy, as revenue from oil and gas exports account for more than half of the country’s budget. The Kremlin’s 2015 draft budget assumed Russia’ key Urals export blend at $100 per barrel, which has now been revised to $80 per barrel. The Brent price has lost more than 40 percent since its peak in June of $115. The slowdown in the Russian economy is due to structural reasons, the bank said. Negative factors reducing economic activity include a low oil price, and Russia being cut off from western financial markets, as part of Western sanctions. Russia’s counter-sanctions banning agricultural imports have contributed to rising inflation, as well as increasing the competitiveness of Russian goods. Domestically, Russia faces labor shortages, which is stunting productivity. 'Ready with $85 billion' Central Bank chief Elvira Nabiullina, who has been at the helm since June 2013, said the ruble is currently undervalued by 10-20 percent and in 2015 it will strengthen. At present, the exchange rate doesn't take into account 'agitation' such as low oil prices, she said. "We have several models; we expect fluctuations from the base demand. According to our estimates, currently such fluctuations at the current oil price range from 10 to 20 percent," Nabiullina said, as quoted by TASS. If oil prices continue to drag down the ruble, the Central Bank has $85 billion on hand to distribute to banks in 2015 in a so-called 'stress scenario', should oil prices remain at $60 per barrel. |
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Post by jna on Dec 13, 2014 19:49:09 GMT -5
Another collapse of RUB, it broke trough the 55 RUB per USD threshold and in the last 3 days skyrocketed to 58 RUB per USD.
Not only the situation isn't stabilizing, the collapse is gaining speed, right now its basically one RUB more per USD every DAY.
State Duma is reviewing a new law on urgent measures to help prop up the collapsing RUB mainly to force oil exporters convert their cash into national currency at least partially - no sane businessman stores his profits in RUB unless under a barrel of a gun.
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Post by jna on Dec 15, 2014 16:57:33 GMT -5
What I considered to be collapse turned out to be a walk in the park compared to what happened in the last 2 days.
USD-to-RUB exchange rate changed by 10 RUB in just 2 days - jumping from 55 to 65 RUB per USD.
Meanwhile...
- Russian Central Bank announces it expects GDP to decreased by ~5% in 2015.
- Moscow authorities warn against the return to prices displayed in CCU vs. RUB, promising persecution
- Russian Statistics Agency reports for the first time since the 2008 crisis decrease in industrial output in November 2014
- Valuation of Russian companies collapses on international Markets: Yandex loses 8%, VTB Bank loses 7%, Sberbank loses 14%.
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