Category: Russia

(Bloomberg) — The ruble fell for a second day as Russia braced for the biggest month for external-debt repayments until at least the third quarter amid mounting political turmoil and declining oil prices. The currency depreciated 0.8 percent to 62.09 versus the dollar as of 12:03 p.m. in Moscow. Russian government bonds declined, pushing the yield on the five-year note up five basis points to 14.47 percent, the highest in a month on closing basis. Tens of thousands marched through Moscow to honor slain political activist Boris Nemtsov in the biggest show of support for Russia’s opposition in three years. About $19.7 billion of external debt for local borrowers is coming due in March, making it the most intense month for repayments since December and until at least October, according to Bank of Russia data. The amount due comes amid rising economic pressures in the nation grappling with the […]

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(Bloomberg) — Russia’s Finance Ministry is seeking permission to use more money from one of the country’s two sovereign wealth funds as a deteriorating economy and last year’s drop in oil prices dry up budget revenue. The ministry in Moscow wants to use 3.1 trillion rubles ($50 billion) to 3.6 trillion rubles of the 5.9 trillion-ruble Reserve Fund, First Deputy Finance Minister Tatiana Nesterenko said in a statement on Friday. The government was previously able to use 500 billion rubles to cover the budget gap. The deficit may be 3.7 percent of economic output this year, the widest since 2010, she said. Russia is on the brink of recession as the price of oil, which together with natural gas accounts for about half of state revenue, fell to the lowest since 2009. The effect was compounded by sanctions the U.S. and its allies imposed after President Vladimir Putin annexed […]

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Vladimir Putin, Russia’s president. Photographer: Oliver Bunic/Bloomberg (Bloomberg) — The European Union will probably overcome internal divisions and extend economic sanctions against Russia that expire in July even as the conflict in eastern Ukraine shows signs of abating, according to a survey of economists. The punitive measures will remain in place, according to 13 of 24 respondents surveyed by Bloomberg. Analysts are evenly split over whether initial violations of a cease-fire negotiated in Belarus this month may trigger new and tighter curbs. The EU’s next planned leaders’ summits, which may include a debate on Russian sanctions, are on March 19-20 and June 25-26. The 28-member bloc, along with the U.S., has continued to raise the threat of more sanctions even as a cease-fire sealed this month in Belarus takes hold in eastern Ukraine following a flareup in fighting. The penalties are heaping further pressure on an economy sliding into […]

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The skyscrapers of the Moscow International Business Center on Oct. 28, 2014. (Bloomberg) — The ruble rallied for a second day, extending its biggest monthly increase on record, while Russian stocks and bonds gained as oil climbed and a cease-fire in Ukraine showed signs of holding. The currency rose 1.4 percent to 60.5470 per dollar by 12:08 p.m. in Moscow, taking its advance in February to 15 percent. Crude oil, Russia’s main export earner, is trading near its highest level this year, while Ukraine signaled that the cease-fire struck this month may endure. “Oil rallies and so does the ruble,” Dmitry Polevoy, chief economist for Russia and CIS at ING Groep NV in Moscow, said in e-mailed comments. “The geopolitical concerns have mostly been priced in, and to move the ruble considerably weaker, any new economic sanctions must be much tougher than what they are right now in reality, […]

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Moody’s downgrades ratings for seven Russian banks, including the financial arm of energy company Gazprom. Photo by Denis Larkin/Shutterstock The downgrade for Sberbank, Bank VTB, Gazprombank, Russian Agricultural Bank, Agency for Housing Mortgage Lending, Vnesheconombank and Alfa-Bank follows a lowering by Moody’s of the government debt rating to Baa3, the lowest investment grade rating, last week. Moody’s said it also lowered the financial strength ratings of Sberbank, Bank VTB, JSC , Gazprombank and Alfa bank. "This is due to Moody’s expectation that the prolonged recessionary environment in Russia will produce a very challenging operating environment for the country’s leading banks and thereby impact their financial fundamentals," the ratings agency said in a Tuesday profile. Standard & Poor’s and Fitch Ratings each lowered their ratings for Gazprombank and others earlier this year. The financial arm of the Russian energy company is the subject of sanctions imposed in Russia in response […]

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Ukrainian conflict, low oil prices, putting pressure on Russian economy, though Kremlin defends policies amid Moody’s credit downgrade. UPI/Ivan Vakolenko Finance Ministry criticized a credit downgrade from ratings agency Moody’s as pessimistic and out of step with developments in the oil-laden economy. "I suspect that in making this decision to lower the rating the agency was guided by political factors above all," Finance Minister Anton Siluanov said Saturday. "I believe that Moody’s rating is not just overly negative, but also based on an extremely pessimistic forecast, unparalleled these days." Moody’s said the security situation in Ukraine and the weak market for crude oil was diminishing Russia’s economic strength. The rating’s agency last week said the outlook for Russia was negative, leading to a downgrade in the government bond rating. "The risk is rising, although still very low, that the international response to the military conflict in Ukraine triggers a […]

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Russian energy company Gazprom Neft shifts first winter batch of oil from field located above the Arctic Circle. Photo courtesy of Gazprom Neft Gazprom Neft said Friday it made its first ever winter shipment of oil from a field located above the Arctic Circle. The company said 117,280 barrels of crude was shipped on a tanker to European consumers from the Novoportovskoye, or Novy Port, field in the Yamal Peninsula under the escort of an icebreaking ship. Board Chairman Alexander Dyukov said his company has invested "significant funds" in developing a commercial-scale arctic oil operation. "We are continuing to actively develop these projects, and in just a few years they will account for a significant part of Gazprom Neft’s production," he said in a statement. Greenpeace has objected to Russian efforts to extract oil from the arctic, saying it poses a risk to the pristine ecosystem there. Greenpeace last […]

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Russia’s credit rating was cut to junk by Moody’s Investors Service as the conflict in Ukraine and plunging oil prices curb growth and erode financial stability. Photographer: Akos Stiller/Bloomberg (Bloomberg) — Russia’s credit rating was cut to below investment grade by Moody’s Investors Service, which joined Standard & Poors in ranking the country’s debt as junk, citing the conflict in Ukraine and plunging oil prices. The rating company downgraded Russia one step to Ba1, the highest non-investment level and in line with countries including Hungary and Portugal. Moody’s has a negative rating outlook on the country, according to a report released Friday. The move follows Standard & Poor’s decision to cut the country to speculative grade in January. “The existing and potential future international sanctions, the erosion of the country’s foreign exchange buffers and persistently lower oil prices plus high and rising inflation will take a negative toll on […]

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A Nato exercise in Estonia Nato forces must prepare for a large-scale conventional assault by Russia on an eastern European member state designed to catch the alliance off guard and snatch territory, the deputy supreme commander of the military alliance has warned. Openly raising the prospect of a conventional armed conflict with Russia on European soil, the remarks by Sir Adrian Bradshaw, second-in-command of Nato’s forces in Europe, are some of the most strident yet from the alliance. The warning comes as relations with the Kremlin worsen just days into a second fragile ceasefire aimed at curbing the bloodshed in eastern Ukraine between Kiev’s forces and Russian-backed separatists. Speaking at the Royal United Services Institute think-tank in London on Friday, Sir Adrian said that as well as adapting to tackle the “hybrid” military tactics — a combination of conventional, irregular and cyber warfare techniques — being used by Russia […]

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