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Analysts have gradually raised their forecasts for where the key rate will end this year, to 7.5% from 7.13% in the previous poll. "High budget spending is the key issue," said Anton Tabakh, Chief Economist at RA Expert, who expected the upsurge in inflation at the beginning of the year due to higher budget spending to be contained. "But at the same time, there will be a preventative rate increase and, accordingly, we see the key rate at 7.5% in December, from 8%-8.25% in the middle of the year." Tabakh also said that all risks were higher and the level of uncertainty elevated. Inflation expectations, an indicator to which the central bank pays close attention ahead of meetings, rose to 12.2% in February.

☆ Russian 2023 budget deficit to widen as price caps take effect - Scope
▼ + stars: | 2023-02-24 | by ( ) www.reuters.com time to read: +1 min

BERLIN, Feb 24 (Reuters) - Lower revenues from oil and gas exports will significantly widen Russia's budget shortfall this year, according to an analysis from the European ratings agency Scope obtained by Reuters on Friday. Scope expects the deficit to rise to 3.5% of gross domestic product (GDP), significantly wider than the government's forecast of 2% of GDP, according to the analysis. Another way to plug the deficit is to issue domestic bonds to state-owned banks, backed by liquidity provided by the Bank of Russia. Western countries want caps on the price of Russian oil to reduce income for the Kremlin's war chest for its invasion of Ukraine, which entered its second year on Friday. Reporting by Rene Wagner; Writing by Friederike Heine; Editing by Rachel More and Kevin LiffeyOur Standards: The Thomson Reuters Trust Principles.

The SWIFT global payments system block and the freezing of more than $300 billion worth of central bank reserves abroad took Russia by surprise. The top executive at the top-20 Russian bank said Moscow was unprepared in particular for liquid assets being blocked and euro and dollar swaps becoming unavailable. "No one expected that the central bank would come under sanctions, and that it would be unable to help with foreign currency liquidity at that difficult moment," they said. 'BEST FRIEND'For banks, central bank support was crucial to weathering the initial hit to their business. The central bank's forecast is more restrained, at around 1 trillion roubles.

☆ Russian banks' profits reached 258 billion roubles in Jan - central bank
▼ + stars: | 2023-02-20 | by ( ) www.reuters.com time to read: 1 min

MOSCOW, Feb 20 (Reuters) - Russian banks' profits totalled 258 billion roubles ($3.38 billion) in January, 1.5 times higher than in the same month of 2022, Russia's central bank said on Monday. Alexander Danilov, director of the central bank's banking regulation and analytics department, said last month Russian banks' profits could exceed 1 trillion roubles in 2023. Banks' corporate credit portfolio shrank by 140 billion roubles in January, while their forex portfolio grew by 0.3%, the Bank of Russia said. Banks gradually increased investments in OFZ treasury bonds in the same month, buying around two-thirds of bonds on offer, it added. ($1 = 76.2455 roubles)Reporting by Elena Fabrichnaya and Alexander Marrow; Writing by Marina Bobrova; Editing by Jan HarveyOur Standards: The Thomson Reuters Trust Principles.

[1/2] People stand in line to use an ATM money machine in Saint Petersburg, Russia February 27, 2022. For the majority, who bank in roubles with huge retail lenders, such as Sberbank (SBER.MM), the answer is: not much. "Nothing has changed for me at all," said Vyacheslav Fatikhovich, a taxi driver in the Urals city of Yekaterinburg. "The only thing is that customers are paying less by card and more often in cash," he said. "I quickly opened three UnionPay cards at different Russian banks," Andrey, who now works outside Russia, said.

☆ 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.

☆ Russian c.bank sees record $74 bln deposit auction as budget deficit widens
▼ + stars: | 2023-02-07 | by ( ) www.reuters.com time to read: +2 min

The central bank set the auction limit at 5.95 trillion roubles. "Since December, we have observed a peak liquidity surplus in the system," said Denis Popov, chief macroeconomic analyst at Promsvyazbank. Russia's structural liquidity surplus has increased to 3.38 trillion roubles as of Feb. 7, from 0.57 trillion roubles at the start of the year. "In our view, the likelihood that they turn out higher than the 29 trillion roubles that is budgeted for is quite high." Extrapolating from current dynamics until the end of the year and assuming that non-oil and gas revenue targets are achievable, Belenkaya estimated that the budget deficit could reach 6.5 trillion roubles, well above the planned 2.9 trillion roubles.

In doing so they should deploy the financial innovation which helped to halt the Latin American debt crisis of the 1980s: Brady bonds. It requires a 21st-century Marshall Plan led by America and joined by European allies. For example, the European Bank for Reconstruction and Development has 520 projects in Ukraine and will play an important ongoing role. Specifically, the government in Kyiv should investigate an equivalent to the Brady bonds. For Ukraine to benefit from similar relief, the U.S. Treasury and other key finance ministries should back new Brady bonds.

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.

☆ Sanctions forcing Russia's Sberbank to close UAE office, company says
▼ + stars: | 2022-12-26 | by ( Alexander Marrow | ) www.reuters.com time to read: +2 min

Sweeping Western sanctions targeted Russia's financial system after Moscow sent tens of thousands of troops into Ukraine on Feb. 24. Sberbank is one of several major Russian banks to have been blocked from the international SWIFT payments system and some senior executives have been personally hit by sanctions. "Unfortunately, in the context of sanctions restrictions, we are facing serious constraints on our SberInvest Middle East office in Abu Dhabi and we, unfortunately, are forced to close it in the first quarter of 2023," Vedyakhin told reporters. He said Sberbank would continue serving clients in the UAE market and that active communications were underway with Chinese regulators about opening an office there. Vedyakhin declined to give full-year forecasts but said Sberbank was confident of being profitable in December.

☆ Russia could hike rates in 2023 if inflation risks have big impact -cenbank
▼ + stars: | 2022-12-26 | by ( ) www.reuters.com time to read: +2 min

He pointed to high inflationary expectations, a labour crunch, logistical constraints, the higher-than-planned fiscal deficit trajectory and worsening external conditions as risks. "The need for raising rates will be dictated by (these factors), in whatever combination and in whatever volume they will eventually materialise in 2023." Zabotkin also said the structural shift Russia's economy is undergoing is a process that takes longer than a typical cyclical downturn. A Reuters poll last week suggested that the central bank will have limited room to cut interest rates in 2023 as inflation is set to remain above target. Reporting by Elena Fabrichnaya and Alexander Marrow; editing by Mark HeinrichOur Standards: The Thomson Reuters Trust Principles.

☆ Russia reportedly wants to further cut its dependence on the US dollar by buying up Chinese yuan on the currency market
▼ + stars: | 2022-12-22 | by ( Carla Mozée | ) www.businessinsider.com time to read: +2 min

Russia will start purchasing yuan on the currency market in 2023 if the country's oil and gas revenues meet expectations, Reuters reported Thursday. The Bank of Russia will buy yuan if budget revenues from oil and gas exports exceed 8 trillion rubles, the report said. Russia in February stopped intervening on the currency market after its use of foreign exchange reserves was restricted by Western sanctions following Moscow's invasion of Ukraine. Russia has since accelerated its shift toward China's currency as its access to dollars and euros has been limited. But the Bank of Russia wouldn't do so while the government continues to spend its oil and gas revenues.

☆ 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.

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.

☆ Rouble weakens to 63 vs dollar as rate decision edges closer
▼ + stars: | 2022-12-12 | by ( Alexander Marrow | ) www.reuters.com time to read: +2 min

Markets also are awaiting a flurry of other interest rate decisions this week, including from the U.S. Federal Reserve and the European Central Bank. The rouble has showed a largely muted reaction to oil price swings in the last week. Volatility has been high as a price cap on Russian oil kicked in. Brent crude oil , a global benchmark for Russia's main export, was down 0.7% at $75.6 a barrel, pushing Russian stock indexes lower. For Russian equities guide seeFor Russian treasury bonds seeReporting by Alexander Marrow; Editing by Kim Coghill, KIrsten DonovanOur Standards: The Thomson Reuters Trust Principles.

☆ Russia's central bank just issued a warning about 'new economic shocks,' and it shows the new $60/barrel cap on oil is working
▼ + stars: | 2022-12-08 | by ( Huileng Tan | ) www.businessinsider.com time to read: +3 min

The price cap on Russian crude and EU's oil embargo present "new economic shocks," the Bank of Russia said. They could "significantly reduce" Russia's economic activity in the coming months, per the bank. Russia is mulling options to counter the price cap, including banning oil sales to some countries. The European Union, G7, and Australia have set a price cap for Russian crude that kicked in on Monday. On top of that, the EU has also banned all seaborne Russian crude.

☆ Russian central bank raises over 3 trillion roubles at one-week deposit auction
▼ + stars: | 2022-12-06 | by ( ) www.reuters.com time to read: 1 min

MOSCOW, Dec 6 (Reuters) - Russia's central bank on Tuesday said it had raised a total of 3.06 trillion roubles ($48.65 billion) at a one-week deposit auction. The Bank of Russia conducts weekly deposit auctions to manage aggregate liquidity and temporarily absorb excessive funds from credit institutions under a structural liquidity surplus. Government debt and liquidity auctions have seen record volumes of late. ($1 = 62.9000 roubles)Reporting by ReutersOur Standards: The Thomson Reuters Trust Principles.

☆ Russia's more gradual economic contraction to extend into 2023
▼ + stars: | 2022-12-02 | by ( Alexander Marrow | ) www.reuters.com time to read: +3 min

After initially dire predictions of a double-digit GDP slump, analysts and officials have gradually been improving forecasts as the Russian economy demonstrates better-than-anticipated resilience. But the decline will continue at a similar pace in 2023, with analysts now forecasting a 2.5% drop. Over time, economists have acknowledged that the contraction is likely to be less sudden, but more prolonged than first expected. "We cannot rule out a deeper contraction next year when compared with 2022, it could be 5-6%." After a rate hold on Dec. 16, the bank will continue easing monetary policy in 2023, the poll suggested, with the key rate set to end next year at 6.75%.

☆ Russian economy shrinks 1.7% in Jan-Sept, but capital investment up
▼ + stars: | 2022-11-30 | by ( Brendan O'Brien | ) www.reuters.com time to read: +2 min

Capital investment rose 5.9% year-on-year between January and September to reach 16.418 trillion roubles ($271.65 billion), Rosstat said. Data also showed that retail sales, the gauge of consumer demand, declined 9.7% in October in year-on-year terms after a 9.8% fall in the previous month. All that comes as consumer prices climbed for the 10th week running, perhaps giving the central bank pause for thought. The Bank of Russia is widely expected to keep its key rate unchanged at 7.5% when its board meets on Dec. 16. ($1 = 60.4390 roubles)Reporting by Alexander Marrow and Darya Korsunskaya; Editing by Mark TrevelyanOur Standards: The Thomson Reuters Trust Principles.

☆ Bank of Russia open to relaxing curbs on non-residents transactions if sanctions eased
▼ + stars: | 2022-11-29 | 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 UkraineMOSCOW, Nov 29 (Reuters) - Russia is open to relaxing restrictions on transactions by so-called unfriendly non-residents in exchange for the un-freezing of Russian assets abroad, its central bank said on Tuesday. Russia implemented capital controls after Western sanctions over Moscow's actions in Ukraine and prevented foreign investors from unfriendly states, those that have imposed sanctions, from selling securities of Russian issuers. "Requirements for residents can be liberalised as much as possible, while the strictness of requirements for non-residents should differ depending on their jurisdiction," the Bank of Russia said in a report. Some overseas companies and investors found they had assets essentially trapped in Russia after Moscow responded to Western sanctions with its own restrictions. Russia's central bank said it may consider liberalisation, namely the unblocking of assets, in relation to unfriendly countries in response to the easing of sanctions.

☆ Russian c.bank to consider subdued inflationary pressure at next rate meeting
▼ + stars: | 2022-11-22 | by ( ) www.reuters.com time to read: 1 min

MOSCOW, Nov 22 (Reuters) - The Bank of Russia will consider still subdued inflationary pressure and households' inflation expectations when making its next decision on interest rates in December, Deputy Governor Alexei Zabotkin said on Tuesday. Zabotkin told reporters that weekly inflation data in November was suggesting muted inflationary pressure. When holding rates last month, the central bank said Russia's partial mobilisation for its military campaign in Ukraine may initially create disinflationary pressure due to reduced consumer demand. The next rate-setting meeting is due on Dec. 16. Reporting by Elena Fabrichnaya; Writing by Alexander MarrowOur Standards: The Thomson Reuters Trust Principles.

☆ Russia's economy has finally fallen into recession, 8 months after it invaded Ukraine
▼ + stars: | 2022-11-17 | by ( Huileng Tan | ) www.businessinsider.com time to read: +2 min

Russia's GDP fell 4% on-year in the third quarter of 2022 — its second straight quarterly decline. This followed a 4.1% year-on-year decline in its second-quarter GDP — meaning the country has fallen into a technical recession after two straight quarterly contractions. Nabiullina's assessment of the economy followed months of intensifying sanctions against Russia over its invasion of Ukraine. And while firm energy prices had propped up Russia's economy for a while, the tide seems to be turning — in part, due to President Vladimir Putin's partial mobilization order that sent many fleeing the draft. Russia's central bank expects the country's economy to contract by 3% to 3.5% in 2022, Nabiullina said on Tuesday, according to an official transcript.

☆ Russia’s Shrinking Budget Surplus Limits Putin’s War Options
▼ + stars: | 2022-11-11 | by ( Georgi Kantchev | ) www.wsj.com time to read: 1 min

The Bank of Russia has forecast Russia’s gross domestic product will shrink between 3% and 3.5% this year. Russia’s war in Ukraine and the sanctions it triggered are depleting Moscow’s coffers, hurting President Vladimir Putin‘s ability to support the economy and fund the military. Data released by the Russian Ministry of Finance on Friday showed that in the year to October, the government budget surplus stood at 128 billion rubles, or around $2.1 billion, down from a surplus of 2.3 trillion rubles in the same period last year. In October, revenues from a one-off energy tax helped prevent the budget from veering into a deficit for the year, which economists expect to happen by the end of 2022.

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