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☆ Ukraine says allies' concerns hamper talks on war compensation
▼ + stars: | 2023-03-16 | by ( Pavel Polityuk | ) www.reuters.com time to read: +3 min

Ukraine says receiving compensation from Russia is vital for its future. If it doesn't do it voluntarily, (let's) fill a (compensation) fund with Russian money, foreign exchange reserves, Russian assets," Mudra told Reuters in an interview this week. She did not identify the countries that had expressed such concerns but said Ukraine was trying to allay their fears. Despite the obstacles ahead, Mudra said Ukraine hoped that an international mechanism for compensating Ukraine would be established within a year. "This is the first - and an extremely important - step in the creation of this compensation mechanism," Mudra said.

☆ Austria plays down concerns over U.S. scrutiny of RBI over Russia business
▼ + stars: | 2023-03-02 | by ( Alexandra Schwarz-Goerlich | ) www.reuters.com time to read: +2 min

VIENNA, March 2 (Reuters) - Austria's finance ministry on Thursday played down concerns about U.S. sanctions officials scrutinising Raiffeisen Bank International (RBIV.VI) over its Russia business. "The inquiry from the U.S. sanctions authority is a normal process that gives no cause for concern, because sanctions authorities naturally keep informing themselves about Austrian companies doing business in Russia," Austria's finance ministry told Reuters in a statement. The Austrian finance ministry said it would in due course address questions from parliament about Raiffeisen, as the lender's activities drew more domestic political scrutiny. "A risky deal for the Austrian Raiffeisen, which instead of - like other European banks - ending its business in Russia, is focusing on intensifying business relations," Greens lawmaker Nina Tomaselli said in a parliamentary question. The finance ministry welcomed the prospect of such a deal, suggesting it could prevent losses to savers and deposit insurance of hundreds of millions of euros.

☆ Russia's ruble has crashed 20% as Ukraine war costs pile up and energy revenue sinks
▼ + stars: | 2023-03-01 | by ( Filip De Mott | ) www.businessinsider.com time to read: +2 min

Russia's currency is trading at 75 rubles per US dollar, the lowest it has been in 10 months. The 20% depreciation since December comes amid falling energy revenues and higher government spending. While the Russian central bank's steep rate hikes and capital controls have helped prop up the ruble since then, new sanctions that began in December targeting the Kremlin's energy revenue are weighing on the currency. Russia's oil and gas revenue plunged nearly 40% in January, the International Energy Agency said. Russia sold 54.5 billion rubles worth of yuan in January and planned to triple that amount in February to 160.2 billion rubles.

☆ Yellen says legal obstacles remain on seizure of Russian assets to aid Ukraine
▼ + stars: | 2023-02-27 | by ( David Lawder | ) www.reuters.com time to read: +3 min

Feb 27 (Reuters) - U.S. Treasury Secretary Janet Yellen said on Monday that Russia should bear the costs of damage caused by its invasion of Ukraine, but there are "significant legal obstacles" to confiscating major frozen Russian assets. Washington has confiscated assets used in criminal activity but central bank and other large pools of assets frozen by sanctions are another matter. "We have on this small scale, seized assets, but there are certainly legal challenges in doing more than that," she said. The United States and Western allies have seized more than $300 billion in Russian central bank foreign currency assets frozen by sanctions. The assets are held abroad, with a significant portion at the Federal Reserve Bank of New York, but remain under Russian ownership.

"America will stand with Ukraine as long as it takes," Yellen, flanked by sandbags at the cabinet ministers' office, told Ukrainian Prime Minister Denys Shmyhal. Yellen also announced the transfer of the first $1.25 billion from the latest, $9.9 billion tranche of economic and budget assistance from Washington. The latest funds are part of $45 billion in new military, economic and humanitarian approved by Congress in December as part of broad U.S. budget legislation. Yellen said such economic support is keeping Ukraine's government and critical public services running, schools open and pensions paid, providing a "bedrock of stability" that fuels Ukrainian resistance. 168, where the salaries of teachers, administrators and support staff are reimbursed from U.S. budget support funds.

☆ The West should confiscate Russia's currency reserves to help Ukraine while easing risk to US dollar's dominance, says anti-Putin hedge fund manager
▼ + stars: | 2023-02-24 | by ( Filip De Mott | ) www.businessinsider.com time to read: +3 min

Russian currency reserves should be confiscated and used to help Ukraine, Hermitage Capital CEO Bill Browder said in the FT.To avoid weakening dollar dominance, the US must be joined by others, the long-time critic of Vladimir Putin added. Sign up for our newsletter to get the inside scoop on what traders are talking about — delivered daily to your inbox. But Browder argued those assets should be seized and put to use in the defense and reconstruction of Ukraine. If the US alone confiscated Russian reserves, that would risk the dollar's dominance in global finance, as countries would shift to other currencies out of fear that the same could be done to their foreign reserves, Browder said. To avoid this, he argued that other countries with a reserve currency must join the US, leaving investors with little alternative.

☆ Russia says its economy did better than expected, one year into the Ukraine war. But experts say there's a red flag behind the announcement.
▼ + stars: | 2023-02-23 | by ( Huileng Tan | ) www.businessinsider.com time to read: +4 min

According to Russia's federal statistics service, the country's GDP contracted by 2.1% in 2022. However, Russia stopped publishing some key economic data last year, throwing up a red flag. While this contraction reversed a 5.6% GDP growth in 2021, it did far better than an 8.8% to 12.4% contraction that Russia's economy ministry projected in April 2022. The war in Ukraine triggered heightened concerns over issues related to energy security, particularly about natural gas exports — which Europe was reliant on. The EU's ban on Russian oil imports from December sent countries rushing to load up before the embargo kicked in, which helped prop up Russia's energy coffers.

An Austrian official said that Austrian authorities were monitoring the situation at Raiffeisen and its business in Russia closely because of the bank's importance. Almost a year since Moscow launched what it calls a "special military operation" in Ukraine, Raiffeisen is among a handful of European banks that remain in Russia. Raiffeisen made a net profit of roughly 3.8 billion euros last year, thanks in large part to a 2 billion euro plus profit from its Russia business. Alternatively, OFAC can also resort to less stringent measures such as levying fines and sending warning letters over sanctions violations. OFAC has sanctioned five major Russian banks, including state-backed Sberbank (SBER.MM) part of a response to that country's invasion of Ukraine, as well as wealthy oligarchs.

London CNN —The European Union is setting up a working group to examine whether frozen Russian assets can be used to rebuild Ukraine. The statement added that part of this work would involve obtaining a “clearer picture” of where Russian state-owned assets are located and their value. “In principle, it is clear-cut: Russia must pay for the reconstruction of Ukraine,” Swedish Prime Minister Ulf Kristersson said. A senior EU official estimated earlier this month that the European Union and Western allies had frozen more than $300 billion in Russian central bank assets that could potentially be used to rebuild Ukraine. The European Union is also working on a tenth package of sanctions against Russia.

☆ Analysis: Washington pushes for harsher action against banks with Russia ties
▼ + stars: | 2023-02-14 | by ( John O'Donnell | ) www.reuters.com time to read: +6 min

"We are looking at additional banks and financial institutions to see how Russia deals with the outside world. Some European banks, including UniCredit (CRDI.MI) and Raiffeisen Bank International (RBIV.VI), have large businesses there and must follow local rules to grant payment holidays to soldiers. ENFORCEMENTO'Brien said that the United States would step up enforcement, something the EU also hopes to improve. "We are now looking at how sanctions, including financial sanctions, can be most effective," he said. "While the majority of important Russian banks are sanctioned, there is a lot outside that perimeter that you could go after," said Nicolas Veron, of Washington think tank the Peterson Institute for International Economics.

☆ EU seeks to use frozen Russian funds to rebuild Ukraine
▼ + stars: | 2023-02-14 | by ( ) www.reuters.com time to read: +1 min

OSLO, Feb 14 (Reuters) - The European Union will on Wednesday launch an ad hoc group to investigate how billions of dollars in frozen Russian funds, including central bank reserves, can be used for reconstruction work in Ukraine, the Swedish government said on Tuesday. "The mandate is to contribute to mapping which funds have been frozen in the European Union ... and secondly how to legally proceed to access those funds," Swedish Prime Minister Ulf Kristersson told a news conference in Stockholm. "It's Russian tax payers, not all other tax payers, who must bear the cost of the necessary reconstruction work," Kristersson added. Among the key assets will be Russian central bank funds expected to amount to tens of billions of dollars, Ahnlid said. "The EU has never before used frozen funds for the reconstruction of a war-torn country, so we are in a sense chartering new territory," Ahnlid added.

[1/4] A Russian police officer stands in front of a branch of the Raiffeisen Bank in Moscow, Russia, February 27, 2016. It made a net profit of roughly 3.8 billion euros last year, thanks in large part to a 2 billion euro plus profit from its Russia business. Of UniCredit's more than 20 billion euro total revenue last year, Russia accounted for more than 1 billion euros. Meanwhile, Russian savers lodged more than 20 billion euros with the bank, which offers a place to deposit funds with fewer sanctions risks. It banned investors from so-called unfriendly countries from selling shares in banks, unless the Russian President grants an exemption.

☆ Russian central bank governor on rates, inflation, GDP and oil
▼ + stars: | 2023-02-10 | by ( ) www.reuters.com time to read: +4 min

Feb 10 (Reuters) - Russian Central Bank Governor Elvira Nabiullina and her deputy Alexei Zabotkin gave a news conference on Friday after the regulator held its key interest rate at 7.5%. ZABOTKIN ON INFLATION IN 2023:"The dynamics of annual inflation this year will be very much determined by the months of last year dropping out of the calculations. We had very high monthly values in March and April, and when they drop out of the calculations, respectively, there will be a very rapid decline in annual inflation. As they go out of the calculations, respectively, the annual inflation rate will increase, and by the end of the year we expect it to be in the range of 5-7%." NABIULLINA ON RUSSIA'S GDP FORECASTS"We have improved the forecast for GDP this year.

☆ Russian central bank holds key rate at 7.5%, gives hawkish signal
▼ + stars: | 2023-02-10 | by ( Alexander Marrow | ) www.reuters.com time to read: +3 min

The Bank of Russia kept its year-end inflation forecast at 5.0-7.0%, retaining hopes that it can return inflation to its 4% target in 2024. "If pro-inflation risks intensify, the Bank of Russia will consider the necessity of a key rate increase at its upcoming meetings," the bank said in a statement. The bank now sees its key rate in the 7.0%-9.0% range this year, up from 6.5%-8.5% in the previous forecast. The bank adjusted its 2023 GDP forecast to between growth of 1.0% and a contraction of 1.0%, from a 1.0%-4.0% decline previously. That has implications for Russia's 2023 budget, which is currently based on the $70.10 price.

☆ Putin's government is reportedly pressuring the Russian central bank to stop with gloomy forecasts and give more 'upbeat' updates about its economy
▼ + stars: | 2023-02-08 | by ( Huileng Tan | ) www.businessinsider.com time to read: +3 min

It's pushing the bank to give more positive outlooks for the country's economy, per Bloomberg. The central bank has been candid about Russia's economic pressure amid the war in Ukraine. Through it all, the Russian central bank has been candid about its assessment of the country's economy, which at times stood at odds with more bullish statements from the Kremlin. But that may soon change — Russian officials are putting pressure on the country's central bank to give more "upbeat" assessments about the country's economy, Bloomberg reported on Tuesday, citing people familiar with internal deliberations. Senior government officials have criticized the central bank for mishandling market expectations and for giving forecasts that were too pessimistic and alarmist, Bloomberg reported.

☆ EU bank seeks pledges of more than 2 bln euros for Ukraine this year
▼ + stars: | 2023-02-02 | by ( ) www.reuters.com time to read: +1 min

BRUSSELS, Feb 2 (Reuters) - The European Union's investment bank on Thursday called for more budget guarantees from the bloc's 27 members to match or exceed this year the 2.2 billion euros ($2.4 bln) spent in Ukraine since the Russian invasion last February. The European Investment Bank (EIB) (EIB.UL), the lending arm of the European Union, said it had already disbursed 1.7 billion euros and had another 540 million for ongoing projects. He said much more would be needed to rebuild the country from the war, a task the World Bank last September estimated at $350 billion. The EU is also discussing with global partners the potential use of Russian assets frozen under sanctions to rebuild Ukraine, though legal doubts remain. These include an estimated $300 billion of Russian central bank assets.

☆ Trying to bankrupt Russia could backfire
▼ + stars: | 2023-01-30 | by ( Hugo Dixon | ) www.reuters.com time to read: +7 min

Reuters GraphicsIn the initial aftermath of the invasion, Western allies mostly issued threats to stop buying Russian oil and gas. Russia could push up the global price by carrying out threats to reduce its oil exports. But if the global price rose enough, Russia might still earn similar amounts at lower volumes. But the global gas price would rise, and Russia could direct the liquefied natural gas it currently sells to Europe to other regions. With Kyiv benefiting from military support and the gains from tighter sanctions uncertain, trying to bankrupt Russia is not worth the risk.

☆ EU foreign policy chief hopes bloc agrees next tranche of military aid to Ukraine
▼ + stars: | 2023-01-23 | by ( ) www.reuters.com time to read: +1 min

BRUSSELS, Jan 23 (Reuters) - The European Union's foreign policy chief Josep Borrell said he hopes member states will approve another 500 million euro ($545.00 million) tranche in military aid for Ukraine during a foreign ministers' meeting on Monday. The ministers will also discuss using Russian assets frozen in Europe under sanctions - including 300 billion euros ($327 bln) worth of the Russian central bank reserves - and using the money to help rebuild Ukraine from the war. The foreign ministers are due to add more individuals to its Iran sanctions list over human rights abuses. Borrell said, however, that the bloc could not list Iran's Revolutionary Guards as a terrorist entity until an EU court has determined that they are. ($1 = 0.9174 euros)Writting by Tassilo Hummel, Gbariela Baczynska, Ingrid Melander, Bart Meijer, Philip BlenkinsopOur Standards: The Thomson Reuters Trust Principles.

SummarySummary Companies Russia to resume forex interventionRussia to sell yuan amid lower oil and gas revenueUse of yuan underscores greater role of ChinaMOSCOW, Jan 11 (Reuters) - Russia said it would resume foreign currency interventions with the sale of yuan from Friday, underscoring the growing importance of China's currency in Moscow's efforts to ensure economic stability amid Western sanctions. Russian nominal GDP is likely to be $2.14 trillion this year, the highest level since 2013, according to the International Monetary Fund. Its share of the currency market reached 48% in November, MOEX Group (MOEX.MM) said last month, up from less than 1% at the start of 2022. The Russian central bank said it would carry out forex transactions on the yuan market of the Moscow Exchange - the yuan-rouble for settlement tomorrow (CNYRUB_TOM). ($1 = 68.6875 roubles)Reporting by Reuters Writing by Guy Faulconbridge Editing by Gareth JonesOur Standards: The Thomson Reuters Trust Principles.

☆ Russia Central Bank Worries War Could Spur Inflation
▼ + stars: | 2022-12-16 | by ( Paul Hannon | ) www.wsj.com time to read: 1 min

Russia’s central bank said it is worried that the redirection of manpower and resources to feed President Vladimir Putin‘s war in Ukraine will give new life to a surge in inflation the bank had managed to contain. The Bank of Russia left its key interest rate unchanged on Friday for the second straight policy meeting, diverging again from its Western counterparts, with the Federal Reserve and Europe’s major central banks this week raising their policy rates by half a percentage point. The Russian central bank said it still expects inflation to fall in 2023 from the 12% rate recorded in November and the higher rates recorded immediately after Russia’s February invasion of Ukraine.

☆ Russian central bank holds key rate at 7.5%, warns inflation risks are 'prevailing'
▼ + stars: | 2022-12-16 | by ( Elliot Smith | ) www.cnbc.com time to read: +4 min

The Bank of Russia said the external environment for the Russian economy remains "challenging" and "significantly constrains economic activity." Russia's central bank on Friday held its key interest rate at 7.5% for a second consecutive meeting, but noted that inflationary risks are rising. The Bank of Russia last raised rates in late February, following Moscow's invasion of Ukraine — taking the key rate from 9.5% to 20% at the time. At the same time, pro-inflation risks are up and prevail over disinflationary risks," the Bank said. Russian annual inflation was estimated at 12.7% in December, according to the Bank of Russia, well above its 4% target.

☆ Russia's central bank governor Nabiullina speaks after holding rates at 7.5%
▼ + stars: | 2022-12-16 | by ( ) www.reuters.com time to read: +5 min

Dec 16 (Reuters) - Russian Central Bank Governor Elvira Nabiullina and her deputy Alexei Zabotkin gave a news conference after the central bank left its key rate unchanged at 7.5% on Friday. These funds will return to the Russian banking sector as confidence in macroeconomic stability and in price stability grows. We believe this transaction will ensure the development of the banking sector without the participation of the central bank as an owner. NABIULLINA ON BANKING SECTOR PERFORMANCEAs for 2022 financial results, it is premature to give specific estimates, but I can say that the banking sector has reduced its losses, compared to the level in the middle of the summer. Many banks have reached profitability - most banks have reached profitability, therefore we expect the banking sector to be profitable in 2023.

All 23 analysts and economists polled by Reuters on Monday predicted that Russia would keep its benchmark rate unchanged (RUCBIR=ECI) again on Friday. There is no intrigue surrounding Friday's rate decision, said Dmitry Polevoy, head of investment at Locko Invest. "The 7.5% rate is unlikely to be changed and the neutral signal maintained," he said. Annual inflation slowed to 11.98% in November, partly due to the strong rouble and weak demand. "Inflation is slowing down now, but not sharply," said Andrei Dyuryagin, investments director at MKB Investments.

☆ Russian-installed Kherson official says withdrawing hryvnia from circulation in January
▼ + stars: | 2022-12-10 | by ( ) www.reuters.com time to read: +1 min

Dec 10 (Reuters) - The Russian-installed administration of Ukraine's Kherson region said on Saturday that it had begun changing locally circulated Ukrainian hryvnia currency into Russian roubles, with hryvnia circulation in Moscow-controlled areas of the region to end on Jan. 1. Previously, the Russian-installed administration had said that both the rouble and hryvnia would be accepted in Kherson region. Russian forces took control of most of Kherson region in the early days of Moscow's military campaign in Ukraine, and declared it annexed to Russia in September after a referendum condemned by Ukraine and Western countries. Less than two months later, Russian forces withdrew from Kherson city under pressure from a Ukrainian counteroffensive, while continuing to hold most of the region's territory. Reporting by Reuters; Editing by Alex RichardsonOur Standards: The Thomson Reuters Trust Principles.

☆ First on CNN: Defense bill takes aim at Russia’s pot of gold
▼ + stars: | 2022-12-08 | by ( Matt Egan | ) edition.cnn.com time to read: +3 min

New York CNN Business —A must-pass defense bill now being negotiated in Congress includes new sanctions designed to trip up Russia’s war machine by targeting Moscow’s mountain of gold. If passed, the defense bill would directly sanction any American entities that knowingly transact with or transport gold from Russia’s central bank holdings. As of mid-2021, Russia’s central bank held $127 billion worth of gold, according to the Central Bank of Russia. The gold is stored at vaults within the territory of the Russian Federation, the Russian central bank has said. In June, President Joe Biden announced the United States and the rest of the G7 would impose a ban on imports of Russian gold.

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