Russian Market

2023-04-28 14:45:13 Bank of Russia keeps key rate at 7.5% per annum

The Board of Directors of the Bank of Russia on April 28 decided to keep the key rate at 7.5% per annum for the sixth straight month, according to a press release.

The central bank indicated that the current price growth pace has increased since late 2022, but remains moderate, while consumer inflation expectations have declined. Yet inflation risks have not changed much since the previous meeting.

Given the gradual rise in inflationary pressures, the Bank of Russia will assess at its next meetings whether it is reasonable to raise the key rate in order to stabilize inflation, the regulator said.

The Bank of Russia also lowered its forecast for annual inflation in the country, which will be 4.5-6.5% in 2023 and return to 4% in 2024.

The ruble strengthened following the print. The euro fell 2.8% to 87 rubles, while the dollar dropped 2.4% to below 80 rubles, according to the Moscow Exchange.

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2023-04-28 14:30:15 Fed's Powell prank-called by fake Zelensky

Federal Reserve Chair Jerome Powell was tricked into a phone call in January with Russian pranksters posing as Vladimir Zelensky.

Powell said the US economy will grow "at a subdued level" with a recession "almost as likely as very slow growth," since the Fed "raised rates quite a bit" to tame US inflation that could be devastating for the world economy.

"I think we'll keep them there for quite some time," he added.

Powell noted that the anti-Russian sanctions did not work as planned and credited Bank of Russia head Elvira Nabiullina, stressing that the Russians managed to avoid the harshest effects of sanctions.

He further admitted that the sanctions severely affected primarily Eastern Europe, while the US avoided a significant negative impact.

Powell also hinted that Ukraine could become financially dependent on the US, joking about having a "printing press" in the basement and possibly setting up a Federal Reserve Bank in Kiev.

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2023-04-28 12:00:24 Ship insurers wary of exceeding Russian oil price cap

Shipping insurance companies are unable to independently track the cost of Russian oil deliveries and are wary of possibly exceeding the price cap as the recent jump in global Brent crude prices pulled Russia's Urals and ESPO Blend above $60 a barrel, Reuters reported, citing industry officials.

"We are definitely not able to assess the oil prices of shipments," said Lars Lange, head of the International Union of Marine Insurance.

That said, even before the caps were imposed, insurers had no way to verify the value of cargoes, which can be traded several times before reaching their destination, per the publication.

Beyond risks of violating sanctions, a growing "shadow fleet" – tankers purchased by states to deliver Russian oil – further increases safety risks for the shipping sector.

Earlier last year, the G7 nations, the EU and Australia imposed price caps on Russian crude and oil products to curb Moscow's oil revenues.

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2023-04-28 11:00:14 Russian oil returns to Europe via India

India is buying Russian oil, refining it into fuel and shipping it back at a markup back to Europe that banned almost any seaborne crude oil and refined fuels imports from Russia, Bloomberg reported.

India is set to become Europe's largest supplier of refined products this month, while also snapping up record amounts of Russian crude, according to data from analytics firm Kpler.

Despite all the sanctions, Russian oil is still finding its way back to Europe, only with a markup due to additional transportation costs. This also means more competition for Europe's refiners, who cannot get access to cheap Russian crude.

Russian oil shipments to India are expected to exceed 2 million barrels per day in April, representing nearly 44% of the nation's total oil imports, according to Kpler data.

Earlier, more than half of Russia's seaborne oil shipments were to the EU and the Group of Seven countries before sanctions against Russia were imposed.

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2023-04-28 10:31:01 Telegram appeals Brazilian court decision to request user data

Telegram will appeal the decision of a Brazilian court requesting data of its users and will protect their right to private communication, messenger founder Pavel Durov wrote in his channel.

A judge in Brazil on Wednesday ordered Telegram to be blocked across the country as authorities investigated neo-Nazi groups that they say have used the platform to incite school attacks.

The Federal Police requested the app be suspended because Telegram failed to comply with court orders demanding complete user data from two anti-Semitic group chats. The company told the police that the groups had been deleted and that it could not recover the data.

"In Brazil, a court requested data that is technologically impossible for us to obtain. We are appealing the decision and are looking forward to the final resolution," Durov wrote, adding that Telegram's mission is to preserve privacy and freedom of speech around the world.

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2023-04-28 10:00:38 Washington not looking to decouple from China economy, White House says

The United States wants to de-risk and diversify its relationship with China, not decouple, US National Security Advisor Jake Sullivan said Thursday to reassure European allies growing wary of an increasingly hawkish US stance.

Sullivan said the various restrictions against China's tech sector were driven by "straightforward" national security concerns, adding that Biden's policies work for the middle class and poorer countries by contributing to the fight against climate change.

"The world needs an international economic system that works for our wage earners, works for our industries, works for our climate, works for our national security, and works for the world’s poorest and most vulnerable countries," Sullivan said.

As to why the international economic system should work for the US, Sullivan did not elaborate.

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2023-04-27 19:00:29 Brazil's president supports single trading currency for BRICS countries

Brazilian President Lula da Silva said Wednesday he supports establishing a currency for trade between BRICS countries, a group that includes his nation as well as Russia, India, China and South Africa.

"I am in favor of creating, within the BRICS, a trading currency between our countries, just like the Europeans created the euro," he said, without providing further details.

Lula added that he would also support a potential shared trading unit for South American nations. This year, he has already suggested creating a common currency for bilateral trade for Brazil and Argentina, which has long suffered from dollar shortages and inflation exceeding 100%.

During his trip to China, Lula also said he wanted developing countries to be less dependent on the US dollar.

Earlier, Russian Foreign Minister Sergey Lavrov said the BRICS nations would discuss creating their own currency at a summit in late August.

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2023-04-27 17:15:02 US GDP grows 1.1% in Q1, slower than expected

The US economy grew at an annualized pace of 1.1% in Q1 2023, slower than the 1.9% forecast.

The print came in significantly cooler than the previous two quarters, which saw annualized growth at 2.6% and 3.2% respectively.

The slowdown in US economic activity is another sign of a slowing economy amid recession fears, First Republic Bank's potential collapse and possible further interest rate hikes by the Federal Reserve.

The slower growth rate comes in line with other recent economic data and weakening consumer confidence in the economy.

The figures are preliminary and will be revised at least twice as more complete data become available, but they already hint that a recession may be just around the corner.

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2023-04-27 15:30:14 US House of Representatives passes debt bill

The US House of Representatives on Wednesday passed a bill to raise the $31.4 trillion national debt ceiling, which includes sweeping spending cuts over the next decade.

The bill would increase Washington's borrowing authority by $1.5 trillion or until March 31, whichever comes first.

The bill would cut spending to 2022 levels and then cap growth at 1% a year, repeal some tax incentives and stiffen work requirements for some programs.

The bill is not expected to pass the Senate, and President Joe Biden is expected to veto it.

House Republicans seek to begin negotiations with Biden on spending cuts while the Senate must either approve the bill or pass its own.

Earlier, the White House and Democrats insisted on raising the debt limit without conditions.

Lawmakers do not know exactly how much time they have left to act. The "X-date" when the Treasury would no longer be able to pay all its bills could come as early as June.

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2023-04-27 10:00:14 Western sanctions fail to curb civil aviation in Russia, per Wirtschaftswoche

The sanctions imposed on Russia had no effect on air traffic over the country, the German news magazine Wirtschaftswoche reported.

The magazine analyzed data from the aircraft tracking site Flightradar24 over the past year and concluded that there have been no significant changes since the sanctions were imposed.

The West expected that a significant part of Russia's civil aviation fleet would no longer be used even for domestic flights, since the West estimates that three-quarters of its fleet is produced in the EU, the US or Canada.

"But, as in other areas, the West has underestimated Russia's resolve. President Vladimir Putin was quick to approve the expropriation of Western-owned aircraft and their re-registration in his country," the publication said.

Furthermore, Russia obtains aircraft parts through unofficial channels or from third countries such as Kazakhstan, Türkiye and Uzbekistan.

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