Category: Russia

(Bloomberg) — The ruble fell, extending its worst start to the year since 2009, as the escalating conflict in Ukraine boosted the likelihood of further sanctions against Russia. The currency is headed for a 12 percent drop in January, the worst performance in emerging markets this month. With oil trading near the lowest level since 2009 and violence spreading in eastern Ukraine, only one of 32 economists in a Bloomberg survey expects the central bank to pare back December’s emergency 6.5 percentage point rate increase at a meeting today. Pressure on the ruble “will escalate” and the currency will weaken 16 percent to 82 rubles per dollar in the next three months, according to Credit Suisse AG. Russia’s economy is set for a 5.6 percent contraction this year and the world’s biggest energy exporter won’t repeat 2009’s V-shaped rebound “particularly given the rising risk of further sanctions,” Morgan Stanley […]

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ENLARGE Russian gas giant Gazprom has reported a sharp drop in third-quarter profit, hit by the slide in the ruble and a lack of deliveries to Ukraine. Photo: Reuters MOSCOW—Russian state-controlled gas group OAO Gazprom said net profit plunged 62% in the third quarter of 2014 compared with same period the previous year, hit by the slide in the ruble and a lack of deliveries to key customer Ukraine. Net profit fell to 105.7 billion rubles ($1.56 billion) from 276.1 billion rubles in the third quarter of 2013. Revenue dropped 6% to 1.13 trillion rubles, the company said on Thursday. Shares in Gazprom, which reports its earnings well after other listed Russian companies, were up 0.6% in early trading in Moscow after the results were released, broadly in line with the market. Write to James Marson at [email protected]

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MOSCOW (AP) — The Russian government, facing its worst economic crisis in a decade, on Wednesday proposed cutting planned spending by 10 percent this year and 5 percent over the next two years in all categories except military and social expenditures. Russia’s economy has been battered by lower energy prices, a collapse in the value of the ruble and Western sanctions over its involvement in Ukraine. Russia’s GDP is expected to decline by 4-5 percent this year, the first drop since 2009. The ruble has lost half of its value while the Standard & Poor’s ratings agency downgraded Russia’s credit rating to a non-investment – "junk" – level for the first time in more than a decade. The anti-crisis plan released on the government’s website on Wednesday lists measures that authorities will take to support the economy including over $3.7 billion to prop up Russian banks and $700 million […]

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The Russian economy will run without a deficit only if oil prices stay above the $70 per barrel mark by 2017, Russia’s finance minister said Tuesday.  Low crude oil prices and Continue Reading

Moscow has approved an anti-crisis plan that would introduce structural reforms and reduce budget spending, Russian Finance Minister Anton Siluanov said, PRIME news reported Jan. 27. Siluanov said the one-year plan does not involve budget spending growth. Russia’s declining economy faces pressure from international sanctions and stands to lose from government budget cuts .

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Andrey Kostin, photographed during a lunch at the FT this afternoon. One of Russia’s top bankers on Friday warned that excluding the country from the Swift banking payment system would be tantamount to “war”. The suggestion that Russia could be shut out of Swift triggered widespread alarm in Moscow’s financial community when it was floated by western politicians last summer. Russia’s banks rely heavily on the Belgium-based payments system for both domestic and international payments. However, the move was at the time considered too punitive a sanction, being described by one adviser as “the nuclear option”. Speaking at a panel in Davos on Friday Andrei Kostin, chief executive of VTB , Russia’s second-largest bank, said: “If there is no Swift, there is no banking . . . relationship, it means that the countries are on the verge of war, or they are definitely in a cold war.” “The next day, the Russian and […]

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Historical Museum, St.Basil Cathedral, Red Square, Kremlin in Moscow at night ©iStock Russia’s credit rating was cut to “junk” by Standard & Poor’s on Monday night, underscoring the dramatic economic deterioration in the world’s largest energy exporter. The downgrade is the latest blow to the Kremlin, already buffeted by a collapse in oil prices , wild gyrations in the value of the rouble and western sanctions that have all but shut Russian companies out of global capital markets. It comes as a sharp increase in fighting has ripped apart a fragile ceasefire in eastern Ukraine, triggering threats of fresh sanctions against Russia from the west. The downgrade had been widely anticipated by investors, but the rouble nonetheless tumbled on the news, dropping to 68.76Rb to the dollar. S&P said the downgrade, the first time in a decade that Russia has been assessed as below investment-grade by one of the […]

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A customer shops at a market in Russia’s Kemerovo region in October. ENLARGE Photo: Bloomberg News Russia’s fractured economy suffered another potential blow Monday after credit-rating firm Standard & Poor’s cut the country’s credit rating to junk, sending it below investment grade for the first time in more than a decade. While the move had been largely anticipated by financial markets, the news, which came late in the Russia day, helped drive the battered ruble even lower. In cutting Russia’s rating to “BB+”, S&P cited Russia’s limited flexibility to use monetary policy to help spur growth. Heavily dependent on oil exports, Russia faces mounting pressure from U.S. and European officials over the unrest in eastern Ukraine and its annexation of the Crimea region. On Saturday, U.S. and European leaders threatened new sanctions against Moscow. At the same time, a dramatic 51% slide in the ruble in the past seven […]

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