Economy & random Russia posts.

[TsarSamuil]

US freezes $640mn in sanctioned Russian bank assets.

RT.com
March 06, 2015 11:37

The US has frozen accounts of Russian banks SMP, Rossiya and its subsidiary Sobinbank worth in total $640 million, as part of America’s escalating sanctions war against Russia over its policy in Ukraine.

Russian assets have been frozen in dozens of US financial institutions such as Citibank, Goldman Sachs and JP Morgan Chase, says the Wall Street Journal referring to US Treasury data.

Since March 2014 Western countries have sanctioned Russian politicians, businessmen and companies over the conflict in Ukraine. On March 4, President Obama prolonged US economic sanctions against Russia for another year, saying the country’s policy over Ukraine poses a threat to US security.

Bank Rossiya has confirmed the frozen accounts to RT. It has become hardest hit Russian organization after it fell under US sanctions after Crimea became part of Russia. The frozen accounts of Bank Rossiya in the United States include $572 million which is about 10 percent of its 2013 assets, at today’s exchange rate.

In 2013, Bank Rossiya reported total assets of roughly $5.6 billion (338 billion rubles) at today’s exchange rates. The frozen assets include accounts belonging to Sobinbank, a wholly owned subsidiary.

The bank had its biggest $435,433,344 asset placed on a single US account with a financial company called Computershare Inc. Some tens of millions of dollars were frozen in the accounts of Raiffeisen Bank, according to the US Treasury.

The US explained the freezing of the bank assets on its blacklisted owner Yuri Kovalchuk who is part of the Kremlin inner circle. On April 28, 2014, SMP Bank and Sobinbank, which belong to the Rotenberg brothers, were hit by similar sanctions.

The Russian parliament is considering a so-called Rotenberg law, a bill that would compensate Russian companies and individuals for assets frozen in the West.

However, oligarch Arkady Rotenberg, who’s net worth this year was estimated by Forbes at $1.4 billion, says he had nothing to do with the bill and needs no state subsidies.

SMP Bank saw at least $65 million frozen or 2 percent of its 2013 assets at the current rate. The money is placed on hundreds of accounts, the largest of which are in Citibank ($6.55 million), Deutsche Bank, Goldman Sachs and others.

The companies and individuals who have fallen under US sanctions are losing millions of dollars. Citibank froze around $10 million on four accounts belonging to weapons maker KBP Instrument Design Bureau.

PayPal payment system has frozen the accounts of Donetsk and Lugansk People’s Republics worth $5,354 and $637. The accounts were apparently registered under the militias’ real names. The company declined to comment on the news.

[TsarSamuil]

Ruble strengthens to 10-week high on firmer oil, ECB €1.14trn stimulus.

RT.com
March 06, 2015 10:51

The Russian ruble has clawed its way to around 65.1 against the euro, its strongest since December 26, ahead of the ECB €1.14 trillion stimulus. It’s up against the US dollar at about 59 with Brent above $60/bbl and a more stable Russian financial market.

Russian analysts suggest ruble growth is being mostly driven by the stabilization of Russia’s financial market. The growth comes “partly due to the rising crude oil price, partly thanks to the measures by the Central Bank of Russia (CBR) to stabilize the national currency because of its active action with the currency repurchase agreement [repo – Ed.] tools, which should stabilize the situation in a currency market amidst active payments of foreign corporate debt this month,” Sergey Kozlovsky, head of the analytical department at a broker Grand Capital told TASS.

Among other factors contributing to the ruble’s rise could be Aleksey Navalny’s release from prison on Friday. On February 19 Navalny was sentenced to 15 days not properly organizing a protest meeting.

In the case of the euro, Thursday’s ECB announcement of the start of its easy money policy is another big factor that’s dragging it down. Mario Draghi said the €1.14 trillion bond – buying program will kick off Friday.

The latest US non-farm payroll data and rig counts to be released Friday will be the major oil drivers during the day. Iran nuclear talks also play a big part in oil pricing. Any sign of a long-term agreement between Iran and the six countries in the West would signal huge new supplies from Iran soon coming back on the market.

Game of oil

WTI and Brent crude have been mixed in Friday trading. At the time of publication Brent was up at 60.84 a barrel , with WTI growing to $50.91 a barrel. The escalation of fighting in the northeast Iraq and a worsening security conditions in Libya have caused supply worries.In mid-January oil plunged below $45 a barrel for the first time since 2009, after it hit $115 a barrel in June 2014.

Vladimir Evstifeev, deputy head of analytical department at Zenit Bank, says investors now see fewer risks of a further oil price fall.

“The OPEC representative’s rhetoric that includes expectations of a lasting high oil demand, the operative statistics of its supply in the US and also more action from China’s authorities to stimulate the economic growth create some protection from a possible collapse in quotations,” he told TASS.

On Tuesday key OPEC member, and the world’s biggest oil exporter, Saudi Arabia said next month it will make the biggest discount cut in three years on Arab Light sold to Asia because demand is improving. This would cut the discount by $1.40, its biggest price increase since January 2012, according to data compiled by Bloomberg.

Saudi Arabia is insisting it could survive a price as low as $20 a barrel. Some experts believe Saudi-led OPEC is playing a game to squeeze rival producers out of the market, mainly the US.

“If they are going to keep the prices at $60 per barrel, they can take off line a lot of tight oil production in the United States,” Thomas Rotnem, professor of political science, told RT.

The only question that remains unclear is whether they can really afford to bring the oil prices down. However, some say the huge Ghawar oil fields in the east of Saudi Arabia can be profitable at $10 per barrel, he added.

“Saudi Arabia has definitely had a hand in trying to undercut the fracking industry in America, and it pretty much had some success,” Rotnem said.

Some analysts also fear the world could run out of storage capacity soon, triggering an even steeper fall in oil prices, as producers sell oil to the few remaining buyers with room to store it. The US is now supplying at the levels not seen in the past 80 years, and has filled about 70 percent of the nation’s storage capacity, according to data from the Energy Information Administration. A separate estimate by Citigroup shows European commercial crude storage could be more than 90 percent full.

[TsarSamuil]

China’s biggest rating agency gives Russia’s #3 lender high investment grade.

RT.com
March 18, 2015 13:50

The largest ratings agency in China, Dagong has given a high A- investment rating to Russia’s Gazprombank which is intending to extend its ties to China and other countries in Asia.

"The assigned credit rating from Dagong will foster further development of Gazprombank’s business network in Asia and other countries in the Asia-Pacific region,” the company quotes Gazprombank’s Deputy Chairman Oleg Vaksman in a press release on Wednesday

Dagong assigned the high A- credit rating to Gazprombank for foreign and local currencies, with a stable outlook. The rating is one notch below the sovereign rating of Russia, and at the same level as US.

Gazprombank has said it is considering placing bonds on China’s domestic debt market. The so-called ‘Panda Bonds’ can be placed by foreign companies and banks only in case the borrower receives a rating from a Chinese rating agency.

The Dagong agency says the bank has built a strong system of risk management and, given the weak dependence on debt markets, especially foreign ones; it has a high ability to repay the debt in national and foreign currencies. It also notes that Gazprombank has a significant market share in Russia, and also has a competitive advantage in relation to the process of the banking system’s centralization.

The positive rating assessment by Dagong comes at the right time for the Russian banking sector as it is undergoing continuous pressure from Western sanctions which limit the ability to raise capital on international markets.

Some of Russia’s biggest lenders have been reporting dramatic falls in their bottom line, with the net profit of VTB, Russia's second biggest lender, falling by more than 99 percent in 2014 to $13 million (0.8 billion rubles) against the record profits of $1.6 billion (101.5 billion rubles) in 2013.The bank’s head Andrey Kostin said last week the business model demonstrates stability amid the crisis the Russian economy is going through.

Experts suggest the slowdown is short–lived and Russian banking should recover soon, largely thanks to the support of the monetary authorities.

“The decision by the Central Bank to lower the interest rate by 100 bps is a positive sign indicating that the worst is behind. Further monetary easing will allow Russian banks to improve their financials in the next few months,” Aleksandr Prosviryakov, Treasuries and Commodities Manager at PWC, told RT after Russia's key lender announced its decision.

Gazprombank is ranked third on a list of Russia’s largest banks in terms of assets, with $77.2 billion (4.772 trillion rubles). Earlier in 2015 Gazprom and Gazprom Neft also received positive ratings from Dagong.

[TsarSamuil]

Russia overcomes the worst, sees stabilization – finance minister.

RT.com
March 19, 2015 15:00

The Russian economy has begun to stabilize, climbing from its lowest point, according to Finance Minister Anton Siluanov. He says the ruble is becoming a stronger currency as it has sustainably grown since the beginning of 2015.

"The negative peak has already passed and we are observing certain moments of stabilization," Siluanov said at a meeting of the Russian Union of Industrialists and Entrepreneurs Thursday.

The financial sector is also improving gradually, showing positive dynamics, he said.

"The situation in the financial sector is also stabilizing, we see an increase in yield on debt instruments, and that the financial market is growing," said Siluanov.

Talking about the outlook for inflation in 2015 he said it may be lower than the official forecast of 12.2 percent, adding that he expected price growth to soothe to 6-7 percent by the end of 2016. The Russian Finance Minister expects GDP to fall by three percent this year as investment demand is the only possible source for recovery.

The government has no plans to increase taxes and tighten the screws on business, he said. The Minister of Economic Development Aleksey Ulyukayev added that the moratorium should cover not only tax issues but ‘quasi-tax’ expenses.

The minister also said it is ready to delay the capital amnesty deadline for Russian companies reporting their offshore subsidiaries.

“We are really cooperating with the MPs, we are ready to move the term for reporting about controlled foreign companies from April 1 to the fall, maybe to October 1,” he said.

The amnesty law was first proposed by President Putin in December 2014 and is expected to be signed during the spring parliamentary session.

[TsarSamuil]

Greater freedom for businesses - best response to sanctions, Putin says.

RT.com
March 19, 2015 19:08

Making it easier to do business in Russia and inspire entrepreneurship is the best response to the external challenges including Western sanctions, says President Putin.

It is only through a partnership between the state and business that Russia can overcome the unfavorable economic situation and achieve stable growth, the Russian President said at the Russian Union of Industrialists and Entrepreneurs (RSPP) conference on Thursday. It is impossible to achieve that without trust, common understanding of the nation’s strategic goals and consideration of each other’s interests, Putin added.

It is necessary to demonstrate economic growth in the country, which can be provided by greater freedom of action for the entrepreneurs. That is the best way to make the Western sanctions completely useless, the President suggests.

While Western countries are aiming to hurt Russia for its independent stance on the peaceful resolution of the Ukrainian crisis they have chosen primarily economic leverage. However, Russia has an internal reserve, including the entrepreneurial potential of Russian citizens, which will help the state not to change its principles.

“I would like to repeat that greater freedom for businesses is the best response to all external challenges and limitations. Therefore, we will continue creating the most favorable conditions for all who are ready to invest in the national economy and industry, into the development of technologies and the creation of jobs,” Putin was quoted as saying by RIA Novosti.

However, he warned businesses that there can be attempts, preventing the return of capital to Russia from abroad. “The situation is such that alarming information is coming from some countries and we are getting the impression that attempts may be made to prevent the return of capital to Russia,” RBC cited Putin as saying. This, according to the president could be linked to limits on the use of capital that is currently in foreign jurisdictions.

[TsarSamuil]

Vid,
rt.com/business/243129-russian-economy-markets-recovery/

Russian economy revives despite sanctions - media.

RT.com
March 23, 2015 10:34

The Russian economy has seen a notable rebound with businesses recovering despite a year of contraction caused by Western sanctions. Fluctuations in the domestic currency have narrowed, which brought investors back into the market.

Global investors appear to be optimistic about the future of Russian corporations, as the country’s economic performance provides evidence to recovery, says Bloomberg analyst Matthew Winkler in his article.

Those who invested in ruble-denominated government securities this year have already made a profit equivalent to seven percent in dollar terms, while those who invested in government bonds of other developing countries lost more than one percent from January, he says. The holders of corporate bonds gained even more with a 7.3 percent return in 2015, which leads the index for emerging market corporate bonds compiled by Bloomberg.

The 50 Russian stocks in the MICEX are up 11.9 percent this year, which is better than any North American market, and that, according to analysts, shows confidence is starting to return.

Russian companies were more profitable measured by their Ebitda margins (earnings before taxes, depreciation and amortization) than the rest of the global MSCI Emerging Market Index. Around 78 percent of enterprises represented in the MICEX index showed a greater increase in sales than their counterparts around the world.

For instance, Novatek OAO, a $22.8 billion independent producer of natural gas in western Siberia, saw its sales increase 19.5 percent, compared with 0.76 percent from the sector globally. Oil major Rosneft with a capitalization of $41 billion and production in western Siberia, Sakhalin, the North Caucasus and the Arctic, reported an 18.26 percent annual sales growth, while its international competitors having shown an increase in revenue of just 0.76 percent.

However, the pace of economic recovery strongly depends on investment demand, according to Russian Finance Minister Anton Siluanov. The finance ministry estimates the country’s GDP will fall by roughly three percent in 2015.

At the same time the Russian response to Western sanctions, such as the food embargo, have also proved successful in boosting domestic growth with local consumers preferring homegrown products and services, economist Paul Craig Roberts told RT.

“The sanctions have helped Russian companies, and, more generally, sanctions have helped the overall economy by creating import substitution,” he said adding that in this case he doesn’t see any reasons for the Russian ruble to plunge deeper.

“I don’t think the ruble is unstable for real economic reasons. It was created by the belief that all this money would flow out of Russia and leave Russia. But money doesn’t flow out of countries that have extremely low debt and strong export earnings.”

The ruble, which last year became the world's most volatile currency after the dramatic plunge in oil prices and the imposition of sanctions over Ukraine, is stabilizing. The fluctuations in its value narrowed in 2015 more than any of the other 30 most-traded currencies.

Last week Anton Siluanov said the Russian economy is over the worst and is heading towards recovery with the ruble becoming less dependent on changing oil prices. The finance ministry doesn’t expect any dramatic swings in the ruble’s exchange rate in the short-term.

[TsarSamuil]

Worst over for Russian economy, time to talk success - economists.

RT.com
March 31, 2015 15:35

Economists in Russia and the US agree the worst is over for Russian economy, with Bloomberg changing its tone praising it as an ‘underrated land of opportunity’. Experts agree President Putin’s economic team managed to turn around a pressing environment.

Russia’s economy is recovering from last year’s panic following the slump in oil prices, according to experts.

With the Russian Central Bank’s currency reserves increasing last week for the first time since July, and all of the major economic indicators improving, Western governments should be convinced that economic sanctions have no discernible effect, a Bloomberg View contributor, Leonid Bershidsky said in his article published on March 27.

The managers of the Russian economy, especially at the Central Bank and the Finance Ministry managed to keep Russia’s economy open in a difficult environment, he said.

“We see that the Government has strongly opposed the imposition of any restrictions on the free movement of capital, thus reaffirming the commitment to the course of economic openness,” Aleksandr Prosviryakov, Treasuries & Commodities Manager at PWC, told RT.

Chief economist at BCS Financial Group, Vladimir Tikhomirov agreed, telling RT by phone that the government managed to keep the economy going despite all the risks, including currency risk.

Russia held $131.8 billion of US debt in 2014, according to Bloomberg. While reserves as a whole dropped 23.9 percent in 2014, the holdings of US debt fell 37.6 percent, to $82.2 billion, as Russia started cutting its holdings of the US currency amid the sanctions standoff.

The Russian ruble has been performing well lately; it gained 1.5 percent against the dollar last week in its best winning streak since mid-2013. Moreover, oil has played a much less prominent role in the ruble’s exchange rate in the first three months of 2015. Last year the ruble closely mirrored every action of oil prices - with the oil benchmark losing 50 percent of its value in the last 6 months of 2014, the ruble lost about 44 percent. Now the ruble is doing better than Brent crude.

The Central Bank decided to start easing its benchmark interest rate, cutting the rate from 17 percent to 14 percent. This helped Russia to become an attractive carry trade destination, Bloomberg economists suggest.

Russia is now one of the most attractive countries in terms of risk/return ratio, Prosviryakov said, adding that there was a significant inflow of foreign investment to the Russian market in the last few weeks. He believes the trend will continue.

Global investors also appear to be optimistic about the future of Russian corporations as the country’s economic performance provides evidence to recovery. Around 78 percent of enterprises represented in the MICEX index showed a greater increase in sales than their counterparts around the world.

The growth of quotations for the main Russian financial assets suggests that interest towards Russia is gaining momentum, including from international investors, according to Prosviryakov.

Meanwhile, the Russian government’s forecasts point to a full-year contraction in gross domestic product of about 3 percent in 2015. Bloomberg economists expect a 4 percent drop, while Goldman Sachs predicts a decline of 2.7 percent. The Russian economy will shrink 3-4 percent according to Vladimir Tikhomirov’s forecasts.

Sanctions and restrictions

Russia remains a major market economy that cannot be “derailed by a few timid restrictions,” the Bloomberg analyst wrote in his article, adding that Russia has been named one of the top markets for equity performance this year, along with the US, China and India.

Russian economists say Western sanctions had a double effect on the country’s economy. Restrictions imposed by some trading partners, on the one hand, hampered the business relationship between the companies in these countries with their Russian counterparts, but on the other hand, they have opened up new opportunities for friendly companies, Prosviryakov told RT. Meanwhile, Tikhomirov suggests that Russia’s food embargo also caused problems for the economy with the following wave of inflation.

New business opportunities

Russia has a lot of new business opportunities with different countries that are now mostly coming from Asia. Moscow and Beijing plan to extend their strategic partnership in finance, aviation and space, as well as improve trade and economic cooperation. The two countries decided to switch to local currencies in trading settlements and also to create a joint rating agency. Russia and China have been boosting cooperation in various fields, including the energy sector in which the countries signed a huge $400 billion gas deal.

Moscow is also looking forward to trade in national currencies with Turkey. The countries are working on completion of the Turkish Stream pipeline which is to deliver 15.75 billion cubic meters (bcm) of gas to Turkey, and another potential 47 bcm to Europe via Greece.

Next week Greek Prime Minister Alexis Tsipras is visiting Moscow to hold talks as Russia and Greece want to boost cooperation and strengthen ties.

[TsarSamuil]

Domestic payment cards to have 50% of Russian market by 2018.

RT.com
April 08, 2015 15:31

The number of domestic payment cards in the Russian market could be hundreds of thousands by 2018, which is more than 50 percent of the market, said the head of the National System of Payment Cards (NSPC) Vladimir Komlev.

"We expect that in 2018 the card will represent a significant share of the Russian payments market. In my understanding, this certainly means that not less than 50-60 percent of the Russian card market will have the logo of NSPC," said Komlev. The number of national cards in Russia will amount to "hundreds of thousands” in 2016, he added.

Other international payment systems such as CUP, JCB and American Express will be transferred to the NSPC in the near future.

"We are at the final stage of verifying the terms, I think it will happen in the near future," he said.

The Japanese JCB payment system says it is ready to start cooperating with NSPC by the end of 2015. The company estimated tens of thousands of its cards could be in use in Russia in 2015. The largest Russian banks, including Gazprombank, Uralsib and VTB 24 are also increasing the issuing of ChinaUnion Pay cards.

Russia has already issued 227 million NSPC cards, said the Deputy Chairman of the Central Bank of Russia Georgiy Luntovsky, according to TASS. He also said the CBR expects the company to become self-sufficient by the end of 2015. The system expects to conclude agreements with 10 Russian banks on issuing cards by December.

Russian companies and banks have showed an interest in to acquiring shares in NSPC from the Central Bank, he said.

The law prohibits the sale of NSPC shares for 2 years, as CBR is expected to raise the company's market value first.

Currently Visa and MasterCard account for 90 percent of the cards issued in the country.

In March 2014 both payment systems suspended their service of a number of Russian banks (SMP Bank, InvestCapitalBank, Rossiya and Sobinbank) as part of Western sanctions over the crisis in Ukraine. After that, Russia adopted a law establishing the National System of Payment Cards under the control of the Central Bank of Russia.

[TsarSamuil]

the West sucks!

Ruble 'miracle' pushes 2015 gains to 15%.

RT.com
April 10, 2015 10:37

The Russian ruble continues its scorching ascent, improving 3% against the dollar and nearly 4% versus the euro, the best performance in over four months. The currency, on of the worst performers in 2014, is now the best in 2015.

The US dollar lost nearly 3 percent against the ruble, trading at 50.2902 at 1:04pm in Moscow on Friday. The euro, which has also faced tremendous downward pressure from the €1.14 trillion QE package, slipped four percent, hitting a low of 53.3804 at 1:04pm. Against the pound, the ruble strengthened to 74.2014 at the time of publication.

The currency, the worst performer in 2014, is now the best in 2015. The ruble has recovered 16 percent in 2015, and more than 55 percent since December 16, dubbed ‘Black Tuesday’, when the ruble bottomed out against the dollar at nearly 80 rubles.

“The ruble remains fundamentally undervalued, there is a lot of momentum out there in terms of investor appetite for yield and risk, and that being the case, I think that ruble appreciation in the near term at least has some way to go, I think we could see another 10-15 percent,” Michael Ingram, a market analyst at BGC partners, told RT.

The massive upswing has shocked many analysts, but most agreed the ruble has for the most part shaken off its crude curse, or being intrinsically linked to oil prices.

“We maintain our view that the ruble’s outstanding performance in recent weeks is largely unrelated to oil dynamics, and has actually been driven by international accounts that were closing USD/RUB longs,” VTB Capital analysts wrote in a note Friday.

In the last month alone, the ruble has appreciated by more than 20 percent. In the week that ended April 3, the Russian Central Bank spent $5.5 billion propping up the ruble.

On Thursday, the ruble reached the 52 mark against the dollar at the close of business.

Russian Finance Minister Anton Siluanov agrees that Russia’s over-dependence on oil is over. He told Bloomberg:"The dutch disease is over. The ruble is no longer overvalued in real terms, something that was caused by the excessive use of volatile oil and gas revenues.”

The ruble has been slowly finding its equilibrium after the Central Bank of Russia began to cut interest rates in 2015 after a surprise hike to 17 percent in December when the currency crisis hit. The main lending rate is now back down to 14 percent.

[TsarSamuil]

Ruble passes 50 against USD for 1st time since November.

RT.com
April 15, 2015 20:37

The Russian currency’s upward trend has achieved a psychological victory Wednesday as the ruble traded at 49.90 against the US dollar on the Moscow exchange.

This is the first time the currency, named the worst performer in 2014 and the best in 2015, went as high since November 28. On Tuesday the Russian currency closed at 50.89 against the US dollar on the Moscow Exchange.

As for the euro, it went as down to 52.96 rubles Wednesday - 1.21 rubles less than the previous day, when the EU’s currency sold at 54.17 at the close of Tuesday trading in Moscow.

The ruble has recovered 16 percent in 2015, and more than 55 percent since December 16, dubbed ‘Black Tuesday’, when the ruble bottomed out against the dollar at nearly 80 rubles.

“The ruble remains fundamentally undervalued, there is a lot of momentum out there in terms of investor appetite for yield and risk, and that being the case, I think that ruble appreciation in the near term at least has some way to go, I think we could see another 10-15 percent,” Michael Ingram, a market analyst at BGC partners, told RT.

Growing oil prices largely helped the Russian currency Wednesday higher.

The US Energy Information Administration said the country has increased its oil inventory levels adding 1.3 million barrels for the week ended April 10. The gain was well below the consensus 3.5 million barrel uptick forecast by analysts and signaled that the US supply was falling.

This sent Brent futures for May delivery 5.97% higher to $62.35 for barrel. WTI’s May futures also climbed to $56.09 per barrel, up $2.80 on the day.

However, most experts have lately been acknowledging that the ruble was becoming less dependent on the oil prices. Investor appetite for Russia’s treasury bonds, known as OFZs, has been a strong driver of the ruble’s surge.

“Interest rates on ruble are extremely attractive - you have double digit returns. It comes in an environment when the Swiss issued a ten-year bond at a negative interest rate,” Ingram said.

A rush for Russian bonds is believed to remain in place till the end of April, when the Central Bank of Russia is expected to cut the key rate by another 100-200 basis points from the current 14%.

[TsarSamuil]

Ruble now ‘excessively’ strong - Russian Finance Minister.

RT.com
April 24, 2015 15:17

The Russian ruble has strengthened to a point where it is actually too strong, Russian Finance Minister Anton Siluanov said on Friday during a lecture in St. Petersburg.

“What happened was expected: the volume of gold reserves stabilized, then the ruble started stabilizing and has now strengthened. We believe that it has strengthened excessively,” Siluanov said at a lecture in St Petersburg.

On Friday, the ruble gained 1.22 percent against the dollar, trading at 51.37 at 5:00pm in Moscow. After gaining a record 15 percent in the first three months of 2015, the ruble has begun to weaken, which the Central Bank sees as a good sign. The regulator is trying to reverse the gains the currency picked up this year. However, a stronger ruble could pose problems for exporters who benefit from a weaker currency. At stake is also Russia’s project of import substitution; as the ruble gets stronger customers have more purchasing power to buy foreign goods.

The rapid rise has been spurred by higher oil prices as well as more solid internal economic factors in Russia, such as demand for rubles to buy attractive Russian sovereign debt and the ceasefire in Ukraine. It is the world’s best performing currency of 2015 so far, according to Bloomberg.

In 2014, the currency lost 46 percent of its value, hitting an all-time low of 80 against the US dollar on December 16. The ruble nosedive was in tandem with oil prices, as well as panic that sanctions and low oil prices would negatively affect the Russian economy.

At the same lecture on Friday, the Finance Minister spoke on Russia’s strengthening economic relationship with China, including boosting trade as well as the joint project to develop a route to speed up trade, dubbed the new Silk Road.

Inflation for 2015 is forecast to be 12.2 percent, according to the Finance Ministry.

[TsarSamuil]

Russia’s MPs give final nod to capital amnesty.

RT.com
May 22, 2015 15:32

Russia’s Duma has adopted the final reading of the capital amnesty legislation which is expected to curb the outflow of money from Russia, estimated at $2 trillion in recent years.

The bill was adopted Friday with 344 MPs voting for that and 81 voting against at the final reading.

After President Vladimir Putin signs it into law, Russians will be able to bring their undeclared capital back from abroad without any criminal, administrative and tax penalties. It only applies to violations that took place before January 1, 2015, RIA reports.

Andrey Makarov, the head of the budget and taxes committee at the State Duma, said the new legislation is a chance to “turn the offshore page of the economy and start living from scratch not thinking that either racketeers or law enforcement will come after you.”

Putin first proposed a total capital amnesty in December last year.

[TsarSamuil]

rt.com/files/news/3f/e6/10/00/union-pay_.png

1st national payment card to be launched in Dec – Russian Central Bank.

RT.com
May 25, 2015 11:20

Russia’s national payment card will come into operation by the end of the year, said Central Bank Deputy Chairman Olga Skorobogatova. It’s to ensure smooth electronic transactions in Russia hit by Western sanctions in 2014.

The card will also operate abroad within a year, she said.

“We plan that the national payment card will work in co-branding with four payment systems - Chinese UnionPay, Japan’s JCB and with international payment cards Visa and MasterCard,” Skorobogatova was cited as saying. She added that negotiations are underway with the countries of the Eurasian Economic Community, which are discussing options for cooperation of national payment systems.

The first nationwide payment card is aimed to protect Russian cardholders and provide with constant payment transactions within the country. Outside the country it will be served by international systems, Skorobogatova said.

Some 210 million plastic bank cards have been already issued in Russia, far exceeding the population. By 2018, domestic cards will take 50-60 percent on the Russian market, according to the head of National Card Payment system Vladimir Komlev.

Last year, Russian President Vladimir Putin signed a law to establish national payment card system (NPCS) after both Visa and MasterCard stopped servicing a number of Russian banks which came under US sanctions regarding Moscow’s position over the Ukraine crisis. Russian authorities also decided to establish a national payment card which would not operate only internally, but also abroad.

Visa and MasterCard later signed an agreement to carry out card transactions via the NPCS processing center and settling through the Bank of Russia.

Visa and MasterCard currently dominate the Russian market. In 2014, Visa’s market share in Russia reached 60 percent, whereas MasterCard’s was 35 percent.

[TsarSamuil]

Record $6bn run on Russia’s biggest bank was planned provocation – chairman.

RT.com
May 28, 2015 12:55

The December depositors’ panic that resulted in about $6 billion withdrawal was provoked to destabilize the financial situation in the bank and the whole country, says Herman Gref, chairman and CEO of Russia’s largest bank, Sberbank.

“Unfortunately, we could not avoid the panic. You saw what happened. But I can only say this: first, the attack was coordinated, thousands of sms-messages were sent in each region, including a large number of mailings done from foreign websites,” Grefsaid in an interview to Vedomosti published Wednesday, commenting on the biggest withdrawal of funds in Russian history.

“The target was to destabilize the country's largest bank and financial situation in the country,” he added.

On December 18, Russia’s Sberbank suffered a massive information attack, when people received a text message saying the lender had problems giving out deposits. The same information was transmitted via numerous forums on the internet.

Gref refused to give exact figures, but said that even though 300 billion rubles (about US$6 billion) is not a precise number, it is close to the total sum that citizens withdrew on December 18.

The outflow was historical, we have never seen anything like that happen, said Gref.

An investigation into Sberbank’s security service is in progress and has already paid dividends.

“I would not like to disclose the results. But we do have specific sites and IP-addresses these mailings were sent from, we even know who these addresses belong to. Not all of them are within our reach. But there is no doubt it was a well-planned provocation,” said Gref.

The biggest bank’s withdrawal in Russian history took place two days after December 16, so-called Black Tuesday, when the ruble hit a record low against hard currencies, trading 99.5 against the euro, and at 79 to the US dollar that day.

A drop in oil prices and US-led sanctions pushed ruble to a 55 percent fall against dollar in 2014.

This year has seen a sharp strengthening of Russian national currency.It has been acknowledged the world’s best performing currency in 2015, but this week the ruble has retreated, trading at 52.4 against the dollar and 57 to the euro Thursday at 3pm MSK on Moscow Exchange.

[TsarSamuil]

Russia: Huge industrial trade fair 'Innoprom' opens in Yekaterinburg.

Ruptly TV
Jul 7, 2015



One of the world’s largest industrial exhibitions ‘Innoprom’ opened in Yekaterinburg on Tuesday.