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☆ Russia Tries to Bolster Ruble as Inflation Adds to Economic Woes
▼ + stars: | 2023-08-10 | by ( Paul Sonne | More About Paul Sonne | ) www.nytimes.com time to read: +1 min

The Russian central bank took measures on Thursday to stabilize the currency, amid the latest squall of financial volatility unleashed by Mr. Putin’s war against Ukraine. This time, the challenges are seen in both a struggling ruble that is fueling inflation, but also in government budget deficits that raise concerns about the sustainability of Russia’s intense spending on the war. The weakening ruble neared an exchange rate of 100 per U.S. dollar earlier this week, down by roughly 25 percent since the start of the year. The decline prompted the Bank of Russia on Thursday to halt purchases of foreign currency for the remainder of the year “to reduce volatility.”The central bank’s move should help shore up the ruble, because when the bank spends rubles to buy foreign currency, it increases the supply of rubles in circulation, lowering their value. The ruble was roughly flat in trading on Thursday.

Persons: Vladimir V Organizations: U.S ., Ukraine, Bank of Russia Locations: Russian

☆ Russia says it will halt foreign currency purchases and launch a digital ruble to keep the currency from spiraling further
▼ + stars: | 2023-08-10 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +2 min

The nation's central bank announced it would stop foreign currency purchases through the end of 2023. It has also begun to pilot program for a digital ruble in an attempt to prop up its currency. The digital ruble will be tested with a limited number of clients across 13 banks, though the Russian central bank aims to launch the currency for public use by 2025. Russia's currency slipped further on Thursday, trading at 97 to the US dollar. That's about a 30% decline from what the ruble was worth in January, making it one of the worst-performing currencies this year.

Organizations: Service, Kremlin Locations: Russia, Wall, Silicon, Ukraine, Russian

☆ The wartime economy is making Russians hoard cold hard cash more than ever — the money in circulation reached a record $187 billion in June
▼ + stars: | 2023-08-08 | by ( Huileng Tan | ) www.businessinsider.com time to read: +4 min

In June, the amount of cash in circulation in Russia hit a record $187 billion, per its central bank. Russians are hoarding cold, hard cash amid economic uncertainty, an economist told Novaya Gazeta. Compensation to families of dead fighters and increased demand in Russian-occupied Ukrainian regions also add to the cash in circulation. In June, the amount of cash in circulation in Russia hit a record 17.9 trillion rubles, or $187 billion, data from the Russian central bank shows. To tame inflation, the Russian central bank its central bank raised interest rates by one percentage point on July 21 — double the 0.5 percentage point analysts polled by Reuters had expected.

Persons: Igor Lipsits, there's, Alexey Zabotkin, Wagner, Nikolay Korzhenevsky Organizations: Novaya Gazeta, Service, HSE University, RBC, Wagner Group, Bloomberg, Reuters Locations: Russia, Wall, Silicon, Russian, Ukraine, —, Kazakhstan, Russia's

☆ The Kremlin has pumped so much money into the economy that it's creating a boom — but this house of cards could topple anytime soon
▼ + stars: | 2023-08-01 | by ( Huileng Tan | ) www.businessinsider.com time to read: +4 min

Russia's wartime economy is thriving, the New York Times reported Monday. Corporate loans have increased 19% in the year to June as investments grew, according to The Times, citing Russian central bank's figures. Russia's central bank has also been candid about its gloomy assessments of the economy — which at times were at odds with more bullish statements from the Kremlin. But, the institution has come under pressure from Moscow to give a more "upbeat assessment" about the country's economy, Bloomberg reported in February. In April last year, Russian central bank governor Elvira Nabiullina warned the country's reserves won't last infinitely.

Persons: Wagner, Alexandra Prokopenko, Elvira Nabiullina, Ariel Chernyy, Chernyy Organizations: New York Times, Service, Putin, Times, Reuters, Wagner Group, The, Frank Media, Carnegie Russia Eurasia Center, Bloomberg Locations: Russia, Wall, Silicon, Ukraine, Russia's, Russian, Moscow

The United States and Europe have wrestled for months with the question of how to pay for Ukraine’s reconstruction from the war. As Russia pounds cities, factories and infrastructure in Ukraine, the estimated costs have swelled to $500 billion, with some experts citing numbers as high as $1 trillion. One solution seemed brilliant in its simplicity: What better way to foot the bill, and to make a moral point, than to make Russia pay? Experts warn that it would likely violate international law and potentially set a dangerous precedent for countries to take the assets of others. The money once seemed easily within reach — since the beginning of the full-scale Russian invasion, Western nations have frozen more than $330 billion in Russian Central Bank assets held abroad.

Organizations: Russian Central Bank Locations: States, Europe, Russia, Ukraine, —

A Biden administration source said such conversations with service providers about their requirements have been constant during the implementation of the caps. The price cap bans Western companies from providing services such as transportation, insurance and financing for the oil sold above the cap. Treasury uses a monthly average of prices to calculate the Urals price, which means it may be a while before the Russian oil price can be considered over the cap. 'POLICY PICKLE'The administration, however, is set to move slowly, wary of creating ripples in a market that could send rising global oil prices higher. "But there won't likely be a dramatic change unless oil prices stay high for a while."

Persons: Biden, We’ve, Joe Biden, Wally Adeyemo, Elizabeth Rosenberg, Adeyemo, Ben Cahill, Cahill, Timothy Gardner, Marguerita Choy Organizations: Group, European Union and Australia, Treasury, Foreign Assets, RUSSIA, The State Department, EU, Center for Strategic, International Studies, Thomson Locations: Washington, Ukraine, U.S, Urals, India, China, Russia, Europe, Russian, Eastern

☆ Russian central bank surprises with sharper-than-expected rate hike to 8.5%
▼ + stars: | 2023-07-21 | by ( ) www.reuters.com time to read: +3 min

"Pro-inflationary risks have increased significantly over the medium-term horizon," the bank said in a statement. The central bank raised its year-end forecast for inflation - now just below 4% - to 5.0-6.5% from 4.5-6.5%, and said it was holding open the possibility of further hikes at future meetings. "The much larger-than-expected 100bp interest rate hike ... underscores policymakers’ concerns about inflation risks," said William Jackson, Chief Emerging Markets Economist at Capital Economics. Alfa Bank Chief Economist Natalia Orlova said the rate hike looked like a reaction to the situation on the currency market, given that the other inflation pressures mentioned had been evident at the previous central bank meeting on June 9. Central Bank Governor Elvira Nabiullina will shed more light on the bank's forecasts and policy in a media briefing at 1200 GMT.

Persons: William Jackson, Natalia Orlova, Wagner, Central Bank Governor Elvira Nabiullina, Alexander Marrow, Andrew Osborn, Kevin Liffey Organizations: Reuters, Capital Economics, Alfa Bank, Central Bank Governor, Thomson Locations: Russia, Ukraine MOSCOW, Ukraine, Moscow

☆ Russian central bank hikes rates 100 basis points as Ukraine war sparks ruble crash and labor crisis
▼ + stars: | 2023-07-21 | by ( Filip De Mott | ) www.businessinsider.com time to read: +2 min

Russia's central bank lifted its benchmark to 8.5% from 7.5%, the first hike in over a year. Rates are now going up 100 basis points to 8.5% from 7.5%, as policymakers cited inflationary pressure from the ruble's recent slide and worker shortages. "The increase in domestic demand surpasses the capacity to expand production, including due to the limited availability of labor resources," the central bank said. And despite Friday's rate hike, the ruble fell 1.6% against the greenback to 90.80. In addition, the Kremlin's military spending for the war has widened its budget deficit, adding even more inflationary pressure.

Persons: Vladimir Putin's, Wagner, group's Organizations: Service Locations: Wall, Silicon, Ukraine, Moscow

☆ EU proposal on using frozen Russian funds delayed to September
▼ + stars: | 2023-07-20 | by ( ) www.reuters.com time to read: +2 min

BRUSSELS, July 20 (Reuters) - A European Commission proposal to use frozen public Russian assets to help finance Ukraine will not be published until September, a spokesman said on Thursday. The EU has frozen over 200 billion euros ($223.70 billion) of Russian central bank assets since Russia's invasion of Ukraine, with the bulk held in Belgium. The EU has also frozen privately held funds and legal pushback has already started. G7 countries and the EU have frozen over 300 billion euros ($335.55 billion) combined. A legal proposal we aim to have after the summer break."

Persons: pushback, Roman Abramovich, Julia Payne, Sharon Singleton Organizations: European Union, EU, Group, Thomson Locations: BRUSSELS, Ukraine, EU, Russian, Belgium

☆ Panicked Russians withdrew 100 billion rubles from banks during the Wagner revolt, central bank says
▼ + stars: | 2023-07-12 | by ( Filip De Mott | ) www.businessinsider.com time to read: +2 min

Russians withdrew over $1 billion worth of rubles from domestic banks during the Wagner revolt, its country's central bank said. Whereas 500 billion rubles moved out of banks throughout June, a fifth of that was pulled from June 23-25. Though the act ended after a day, the political uncertainty it set off prompted fearful Russians to withdraw $1.1 billion worth of rubles. According to the Russian central bank, that's the highest cash demanded since late 2022, when Russia introduced a military mobilization decree. Speaking on Thursday at a St. Petersburg conference, Bank of Russia Governor Elvira Nabiullina indicated no plans to step in and support the ruble's exchange rate.

Persons: Wagner, That's, Yevgeny Prigozhin, Elvira Nabiullina Organizations: Service, Bank of Russia Locations: Wall, Silicon, Moscow, Russian, Russia, St, Petersburg

☆ The EU wants to skim $3 billion a year in interest from frozen Russian assets and give it to Ukraine
▼ + stars: | 2023-06-30 | by ( Huileng Tan | ) www.businessinsider.com time to read: +3 min

The EU is considering using the interest generated from frozen Russian assets to help rebuild Ukraine, per CNN. The bloc has been considering seizing frozen Russian assets for this purpose since last year. "It's the best way of using these assets in accordance with EU and international law," Anders Ahnlid, the director general Sweden's national trade board, a government agency, and the head of the EU working group looking into frozen Russian assets, told CNN. This means it would take at least 124 years to help rebuild Ukraine if the interest proceeds were the only funding source. Other options that the EU has considered over the last year include seizing Russian assets and reinvesting the proceeds, or taxing their profits.

Persons: —, Anders Ahnlid, Tiffany Comprés, Comprés, Janet Yellen Organizations: CNN, Service, European, World Bank, EU, FisherBroyles, United Nations, Criminal, Kremlin, European Commission Locations: Ukraine, European Union, United States

☆ Rebuilding Ukraine after the war could cost $411 billion. The EU thinks an estimated $3 billion interest generated from frozen Russian assets every year could help.
▼ + stars: | 2023-06-30 | by ( Huileng Tan | ) www.businessinsider.com time to read: +3 min

The EU is considering using the interest generated from frozen Russian assets to help rebuild Ukraine, per CNN. The bloc has been considering seizing frozen Russian assets for this purpose since last year. The assets would likely generate about 3 billion euros, or $3.3 billion, each year, he told the network. This means it would take at least 124 years to help rebuild Ukraine if the interest proceeds were the only funding source. Other options that the EU has considered over the last year include seizing Russian assets and reinvesting the proceeds, or taxing their profits.

☆ EU leaders push to fund Ukraine with proceeds from Russia's frozen assets
▼ + stars: | 2023-06-29 | by ( Jan Strupczewski | Thomson Reuters | Jan Is The Acting Bureau Chief In Brussels. He Has Been Covering European Union Policy | ) www.reuters.com time to read: +2 min

BRUSSELS, June 29 (Reuters) - European Union leaders will push senior officials on Thursday to find legal ways to funnel proceeds from billions of dollars of frozen Russian assets into projects helping rebuild Ukraine, papers showed. The bloc has said it froze more than 200 billion euros ($218.2 billion) of Russian central bank assets in reaction to Moscow's invasion of Ukraine in February last year. Another 30 billion euros of Russian oligarchs' private assets were also immobilised. The EU also needs to establish where to keep any proceeds from the Russian assets and how to disburse them. Belgium's Euroclear, which settles transactions and safeguards assets, said blocked coupon payments and redemptions boosted its balance sheet by 88 billion euros year-on-year by the end of March to 140 billion euros.

Persons: Kaja Kallas, Belgium's, Ursula von der Leyen, Jan Strupczewski, Philip Blenkinsop, Andrew Heavens Organizations: Union, Kremlin, European Council, High Representative, Commission, EU, Ukraine, Thomson Locations: BRUSSELS, Ukraine, Russian, Brussels, Estonian, Russia, EU, United States, Canada, Britain, Japan

☆ How long will it take for Ukraine's economy to recover? Previous wars offer some clues
▼ + stars: | 2023-06-26 | by ( Silvia Amaro | ) www.cnbc.com time to read: +1 min

The World Bank and the European Commission have estimated that the total cost of reconstruction of Ukraine has surpassed $400 billion. The European Union is looking at how to use frozen Russian assets in the region to help pay for the rebuilding of Ukraine. "We know that there is more than 200 billion euros in Russian central bank's assets in European countries. And in addition to that, there is also around 20 billion euros of private frozen assets," Ahnlid said. Even though the conflict is ongoing, which complicates the rebuilding efforts, Ukraine hopes to attract international support from other governments and private investors.

Persons: Anders Ahnlid, Ahnlid, Volodymyr Zelenskyy, Larry Fink Organizations: World Bank, European Commission, European, CNBC, Ukraine, BlackRock, EU, JPMorgan Locations: Ukraine, Kyiv

☆ Russian ruble briefly reaches 15-month low after Wagner rebellion
▼ + stars: | 2023-06-26 | by ( Krystal Hur | ) edition.cnn.com time to read: +1 min

New York CNN —Russia’s currency hit its lowest level in nearly 15 months on Monday after Wagner mercenaries led a short-lived rebellion against the Kremlin over the weekend. The ruble briefly traded at around 87 per US dollar before paring back some of its losses, last trading at around 84.40 against the greenback. The ruble stayed surprisingly resilient for most of last year, buoyed by the Russian central bank’s aggressive interest rate hikes and capital controls. It almost halved in value when Russia invaded Ukraine last February, trading at over 100 rubles against the dollar. While the ruble has recovered its losses since then, its relationship to the dollar has remained volatile and is down almost 25% so far this year.

Persons: Wagner, Brent Organizations: New, New York CNN, Kremlin, greenback, Texas Intermediate, Reuters Locations: New York, Russian, Russia, Ukraine

☆ Europe wants to use Russia's assets to pay for Ukraine's reconstruction — here's how it might work
▼ + stars: | 2023-06-13 | by ( Silvia Amaro | ) www.cnbc.com time to read: +3 min

European officials are looking at ways to use Russian assets to repay for the reconstruction of Ukraine. The European Union is getting closer to brokering a detailed plan on how to use frozen Russian assets to pay for the reconstruction of Ukraine, a senior official told CNBC. The EU has confirmed that there are more than 200 billion euros ($215.5 billion) and a separate 20 billion euros ($21.5 billion) in assets across the bloc that belong to the Russian central bank and to Russian private individuals, respectively. These assets were frozen by European authorities in the wake of Russia's invasion of Ukraine to sanction the Kremlin for its aggression. She added at the time that these funds should also be put toward the reconstruction efforts, once the war is over and sanctions are lifted off the frozen assets.

Persons: Sweden's Anders Ahnlid, Ahnlid, Ursula von der Leyen, von der Leyen, Jacob Kirkegaard Organizations: European, CNBC, EU, Monday, Peterson Institute for International Economics, Bank, European Commission, United Nations Locations: Ukraine, Russian, Russia, Ukrainian, Nova

☆ Who is Hafize Gaye Erkan, Turkey's first female central bank chief?
▼ + stars: | 2023-06-09 | by ( Karin Strohecker | ) www.reuters.com time to read: +2 min

LONDON, June 9 (Reuters) - Turkey's new central bank governor Hafize Gaye Erkan faces the tough task of alleviating a bruising cost-of-living crisis while hoping to restore investor confidence at home and abroad after years of unorthodox policymaking. Appointed on Friday, the 43-year old is the first woman at the helm of the country's central bank, taking over from Sahap Kavcioglu, who spearheaded President Tayyip Erdogan's rate-cutting drive against a backdrop of soaring inflation. Her new role makes her one of only around a dozen women currently serving as central bank governors around the world, including the likes of ECB President Christine Lagarde, Russian Central Bank Governor Elvira Nabiullina and Serbia's Jorgovanka Tabakovic. Having spent all of her professional life outside Turkey, Erkan has no formal central banking experience, making her leanings for monetary policy unclear. Kathryn Wylde, president and CEO of Partnership for New York City, a nonprofit organization where Erkan once served as a board director, says Erkan was seen as "tough, smart, and effective."

Persons: Hafize Gaye Erkan, Sahap Kavcioglu, Tayyip Erdogan's, Christine Lagarde, Russian Central Bank Governor Elvira Nabiullina, Erkan, Goldman Sachs, Mark Carney, Mario Draghi, William Dudley, Goldman, Marsh McLennan, Kathryn Wylde, Wylde, Karin Strohecker, Jonathan Spicer, Hugh Lawson Organizations: Russian Central Bank Governor, Bogazici University, Harvard Business School's, Management, Research, Financial Engineering, Princeton University, Bank of Canada, Bank of England, New York Fed, First Republic Bank, Banking, Finance, New, Thomson Locations: Sahap, Istanbul, Turkey, New York City

☆ Russia doesn't know what to do with the $1 billion in rupees it is amassing in India each month
▼ + stars: | 2023-06-01 | by ( Huileng Tan | ) www.businessinsider.com time to read: +4 min

Russia's amassing $1 billion worth of Indian rupees each month that it's struggling to use. India has been buying Russian oil using rupees as Moscow has been shut out of the USD-denominated global payments system. And it's not like Russia can send the rupees back home either because India has restrictions over capital flows by foreign investors — the country is looking at $2 to $3 billion worth of rupees stuck in India every quarter. India and Russia are now trying to work out how Russia can use its mounting rupee stash. Another option under discussion is having Russia channel the rupees into Indian infrastructure projects in exchange for equity stakes, per the media outlet.

Persons: Russia's, it's, —, Sergei Lavrov, Lavrov, Moscow doesn't, Alexander Isakov, Ian Hall Organizations: Service, Bloomberg, Bank of, Reuters, Treasury, Russian, Bloomberg Economics, Australian Institute of International Affairs, Griffith Asia, Griffith University, Kremlin, Affairs Locations: India, Moscow, Russia, Ukraine, —, Bank of Russia, Australia, Russian

☆ Using frozen Russian money for Kyiv is barmy
▼ + stars: | 2023-05-25 | by ( ) www.reuters.com time to read: +2 min

European officials are still discussing options to use the proceeds of Russia’s frozen funds to help Ukraine. Yet funnelling the money to the war-torn country, which looks justifiable on moral grounds, would set a bad precedent. Euroclear, the Belgium-based settlement house, is sitting on some 180 billion euros of Russian central bank reserves – part of the 280 billion euros Ukraine’s allies froze last year after Russia’s invasion. The clearing firm also holds another 17 billion euros from sanctioned Russian individuals. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

☆ Russia's National Bank Trust sues commodity traders for over $1 billion
▼ + stars: | 2023-05-05 | by ( ) www.reuters.com time to read: +2 min

May 5 (Reuters) - Russian bank National Bank Trust said it had filed a lawsuit in the British Virgin Islands against a number of major commodity traders and was seeking over $1 billion in relation to what it said was fraud. The case is linked to the central bank's 2017 bailout of two private banks - Rost Bank and B&N Bank (Binbank). National Bank Trust is the legal successor to Rost Bank, which it says was defrauded by employees working for the commodity traders. A Bank Trust spokesperson said its international legal teams had carried out a large-scale investigation and it had extensive evidence to support its case. The central bank aims to liquidate Bank Trust in 2027.

☆ Russia receiving more energy payments in yuan and rouble, says deputy PM
▼ + stars: | 2023-04-22 | by ( ) www.reuters.com time to read: +1 min

MOSCOW, April 22 (Reuters) - Russian Deputy Prime Minister Alexander Novak said on Saturday that Russia will continue to accept more payments for energy exports in the country's rouble currency and China's yuan as Moscow works to ditch U.S. dollars and euros. Moscow is forging close ties with energy-hungry China as well as India and other countries it considers friendly. "The yuan and rouble are in high demand, so that vector will continue. China already pays in yuan for gas and partially for oil, there are settlements in the rouble as well," Novak told Russian state TV. According to the Russian central bank, the yuan's share in Russia's import settlements in 2022 jumped to 23% from 4%.

April 21 (Reuters) - Demand for the Chinese yuan is growing in Russia, the CEO of Sberbank (SBER.MM) said on Friday, adding that the lender has made use of central bank currency swaps providing yuan liquidity. CEO German Gref said Sberbank was gradually raising its interest rates on yuan deposits and had resorted to borrowing from the Russian central bank in yuan several times. Gref said shareholders at the bank's annual general meeting on Friday had supported the board's recommendation to pay a record 565 billion roubles ($6.94 billion) in dividends. Gref said the bank would take advantage of an early payment option and direct around 10 billion roubles to the budget. Gref said Sberbank was not engaged in any talks with Austria's Raiffeisen Bank International (RBIV.VI) over an asset swap.

☆ Russia building reserves in assets the West can't sanction - central bank chief
▼ + stars: | 2023-04-18 | by ( ) www.reuters.com time to read: 1 min

SummarySummary Companies This content was produced in Russia where the law restricts coverage of Russian military operations in Ukraine. MOSCOW, April 18 (Reuters) - Russian Central Bank Governor Elvira Nabiullina said on Tuesday Russia is building its international reserves with assets that cannot be targeted by Western sanctions, the TASS news agency reported. Western countries froze around $300 billion - or half - of Russia's international reserves after Moscow sent tens of thousands of troops into Ukraine last year. The central bank has previously said it considers gold, Chinese yuan and foreign currency held in cash as safe from possible further rounds of Western sanctions. Reporting by Reuters; Editing by Andrew HeavensOur Standards: The Thomson Reuters Trust Principles.

☆ China has not provided extensive assistance to Russia as part of its war against Ukraine even as the two countries forge closer ties, senior Treasury officials say
▼ + stars: | 2023-04-07 | by ( Sam Fossum | ) edition.cnn.com time to read: +5 min

One senior Treasury official said that China is, as of now, unwilling to provide material support to Russia at scale and in a significant way, pointing instead to Russian efforts to source material from North Korea and Iran. The US and its allies have also taken more direct action, sanctioning a Chinese satellite company providing intelligence to Russian forces in January and putting some Chinese companies on the US export control list. But in recent months officials have also begun to see some results from their public and private efforts. Turkish officials told the US last month that their government has been taking further action to block the transit of sanctioned goods directly to Russia, according to a source familiar with the discussion. In a speech earlier this year on the anniversary of Russia’s invasion, US Deputy Treasury Secretary Wally Adeyemo publicly warned Russian intelligence services that the US is monitoring their efforts and is cracking down.

[1/4] FILE PHOTO-Austria's foreign minister Alexander Schallenberg speaks during an interview with Reuters in Vienna, Austria, March 16, 2023. REUTERS/Lisa LeutnerSummarySummary Companies Foreign minister says Russia important for Europe'Part of European culture, whether we like it or not'Schallenberg defends Raiffeisen against criticismVIENNA, March 22 (Reuters) - Russia will always remain important for Europe, Austria's foreign minister said, saying that to think otherwise was delusional. Schallenberg said it was for Austria to enforce sanctions and pointed the finger at other Western banks doing business in Russia. "Austrian companies have to stick to Austrian rules, part of which are the European Union sanctions." "There are enough American banks, one with the name Bank of America, present in Russia," said Schallenberg.

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