Russian Economy General News: #2

Russian CBR says they plan to make Rouble Free Floating by Jan 1,2015

Russia on track to let rouble float freely - central bank chief

It has since relaxed its intervention rules to widen the rouble's trading "corridor" of rates against a basket of currencies and reduce the amount it spends before shifting the boundaries of the corridor.

Nabiullina reiterated that the central bank will let the rouble float freely from Jan. 1, scrapping the trading corridor as part of a long-term policy shift, although it will still intervene if risks to financial stability emerge.

"A floating exchange rate allows (the economy) to bear external shocks, to restrain fluctuations in interest rates," Nabiullina said.

"We will constantly monitor the situation - which now is under control - and if necessary, will intervene. But to spend the gold and foreign currency reserves over a short period of time, that will not be constructive."

Nabiullina said that even when the rouble starts floating next year the central bank will keep intervening in the currency market if risks to financial stability emerge.

"For now (the rouble) is not freely floating, but it is influenced by market factors, including oil prices," Nabiullina said. "Having said that, in our opinion fixing the exchange rate is a counterproductive decision, since this will contradict market factors which we can't control."

The central bank's stated goal is to shift away from a policy of supporting the rouble to place greater emphasis on bringing down stubbornly high inflation.

Makes good read as the Author is from Official Russian Institute

For Russia to lower oil prices reduce dangerous

http://itar-tass.com/opinions/2292

Ruble devaluation compensates for loss of oil revenue

30-35 bin $ project will go along

Russia, China to agree basics of cooperation on Moscow-Kazan rail line project by Dec 15

China is replacing western companies in basically all Russian energy sector

China to have joint venture with Russia in LNG production

Russia’s reserve fund may be used up in two years amid current negative tendencies

http://en.itar-tass.com/economy/755188

Austin wrote:Russia’s reserve fund may be used up in two years amid current negative tendencies

http://en.itar-tass.com/economy/755188

Russian international reserves are 700 bin $ (one of those fonds hold 90 bin$)

If Russia would it could spend all 700 bin $ in one year and in that regard this article might as well be

"Medvedev:Oh my God, Russia without money by the end of next year" but of course it makes no sence.

China is largest USA creditor and now will be Russia creditor too instead of EU and USA. So thats all whats gona happen.

Austin wrote:Russia’s reserve fund may be used up in two years amid current negative tendencies

http://en.itar-tass.com/economy/755188

This is total BS. The reserve fund would be used to shore up Russia's financial industry in case of a meltdown such as the
one in 1998 and 2008. There is no way it would be used to counter a budget deficit. All of this yapping is so lame it
makes one's head hurt. Russia can run sizable deficits for the next few years and would still have less total debt than
the vast majority of the countries on the planet.

The Russian deficit would be about 2% of GDP and over the next three years it would raise Russia's debt to 16% of GDP.
The average debt for the OECD is 113% of GDP and for emerging economies is 25%. The sky is falling, the sky is falling.

There are too many of these idiots in Russia who spout off sensationalist statements. Golikova should keep her trap
shut since she is only destabilizing Russia's investment climate. If she was in the west she would lose her position over
such irresponsible and inflammatory statements.

The ones who should be worried about low oil prices are NATO. The non-conventional supply from fracking and tar sands
is all that is keeping the current supply from collapsing. This production depends on high oil prices. This is not a debatable
fact.

http://government.by/ru/content/5730

The Belorus government is concerned about losses by its exporters of food goods to Russia. They were
expecting a large windfall from the sanctions war with the EU, but instead are seeing losses. The devaluation
of the ruble has led to lower demand.

Since Russians are not starving, it means that import substitution is even happening in the food sector.
NATO is going to be completely surprised by the outcome of its attempt to coerce Russia into backstabbing
the rebels in the Donbas. NATO leaders have made the fatal mistake of believing their own propaganda
about Russia's economy.

Viktor wrote:

Austin wrote:Russia’s reserve fund may be used up in two years amid current negative tendencies

http://en.itar-tass.com/economy/755188

Russian international reserves are 700 bin $ (one of those fonds hold 90 bin$)

If Russia would it could spend all 700 bin $ in one year and in that regard this article might as well be

"Medvedev:Oh my God, Russia without money by the end of next year"  but of course it makes no sence.

China is largest USA creditor and now will be Russia creditor too instead of EU and USA. So thats all whats gona happen.

I read the Russian National Welfare Fund & Reserve Fund are part of Forex , Is this true ? I thought they were not part of forex

Last I saw Reserve Fund was $90 Billion and National WF was $83 billion

Viktor wrote:

Austin wrote:Russia’s reserve fund may be used up in two years amid current negative tendencies

http://en.itar-tass.com/economy/755188

Russian international reserves are 700 bin $ (one of those fonds hold 90 bin$)

If Russia would it could spend all 700 bin $ in one year and in that regard this article might as well be

"Medvedev:Oh my God, Russia without money by the end of next year"  but of course it makes no sence.

China is largest USA creditor and now will be Russia creditor too instead of EU and USA. So thats all whats gona happen.

Foreign reserves is around $450B now and additional reserves over $100B (different names). CB is using up some reserve funds to stabilize the Ruble. Thing is, there are so many different reserves it becomes complicated. I think the gov has various ones to hide it from CB whom is good at wrecking economy.

Regardless, KVS is correct, its to help prop up from deficite, not oil supply money. That being said, economists proved they have really no idea what is going on but industries in Russia are improving and moving along nicely. Idiot as econ minister, Kudrin and CB woman cant even get their facts straight about capital outflow for christ sakes.

Edit: read the article and she stated it is all hypothetical causw revenue from industry is increasing and add in import substitute, they should be fine.

You guys did read the article, right?

sepheronx wrote:

Foreign reserves is around $450B now and additional reserves over $100B (different names). CB is using up some reserve funds to stabilize the Ruble. Thing is, there are so many different reserves it becomes complicated. I think the gov has various ones to hide it from CB whom is good at wrecking economy.

Regardless, KVS is correct, its to help prop up from deficite, not oil supply money. That being said, economists proved they have really no idea what is going on but industries in Russia are improving and moving along nicely. Idiot as econ minister, Kudrin and CB woman cant even get their facts straight about capital outflow for christ sakes.

Edit: read the article and she stated it is all hypothetical causw revenue from industry is increasing and add in import substitute, they should be fine.

You guys did read the article, right?

I read it, but she should not make inflammatory statements about depleting the reserve fund. One thing that is good in the
west is that politicians and industry heads and spokespeople keep the discussion tame when dealing with their national economies.
In Russia, there is this aura of chicken little running around screaming that doom is nigh. This sort of edge to discussion of the
Russian economy has not value aside from being detrimental.

People should know by now that Putin knows his sh*t when it comes to steering Russia. That is why he is so popular.

This is MADNESS      

230 billion deal in the pipeline !!!!!



Russia And China Want To Build The Longest High-Speed Railway In The World To Connect Them

China and Russia are considering building a high-speed rail line thousands of kilometres from Moscow to Beijing that would cut the journey time from six days on the celebrated Trans-Siberian to two, Chinese media reported Friday

The project would cost more than $230 billion and be over 7,000 kilometres (4,350 miles) long, the Beijing Times reported -- more than three times the world's current longest high-speed line

Viktor wrote:This is MADNESS      

230 billion deal in the pipeline !!!!!



Russia And China Want To Build The Longest High-Speed Railway In The World To Connect Them

China and Russia are considering building a high-speed rail line thousands of kilometres from Moscow to Beijing that would cut the journey time from six days on the celebrated Trans-Siberian to two, Chinese media reported Friday

The project would cost more than $230 billion and be over 7,000 kilometres (4,350 miles) long, the Beijing Times reported -- more than three times the world's current longest high-speed line

Excellent, it's been rumored that they would create a high speed rail line but now it's official. I've counted $730 billion of foreign investment deals in to Russia from China in 2013-14 alone, but with this announcement that raises the total FDI deals from China to $960 billion, and the second LNG pipeline will likely bring that number well over a trillion Dollars. What's also rumored is that Russia and China may develop a joint aerospace defense network, similar to what Russia proposed with NATO with it's anti-Russian European Missile (Meat) Shield, which failed might I add. If Russia and China jointly develop a series of criss-crossing fast rail networks, than they can also create a underground aerospace defense network and use the construction as perfect cover
to disguise it.

...But back to the economic question at hand. Now the question remains, can we really still trust Western ratings agency's? According to them Russia is losing blahblahblah amounts of FDI from capital outflow, meanwhile Russia nearly struck a trillion dollars of FDI deals with China, combined with the fact that those same ratings agency's played a pivotal role in causing the 2008 economic panic, I think it's time to stop paying attention to them all toghether! I also would like to hear sepheronx, and kvs chime in on this.

magnumcromagnon wrote:

Viktor wrote:This is MADNESS      

230 billion deal in the pipeline !!!!!



Russia And China Want To Build The Longest High-Speed Railway In The World To Connect Them

China and Russia are considering building a high-speed rail line thousands of kilometres from Moscow to Beijing that would cut the journey time from six days on the celebrated Trans-Siberian to two, Chinese media reported Friday

The project would cost more than $230 billion and be over 7,000 kilometres (4,350 miles) long, the Beijing Times reported -- more than three times the world's current longest high-speed line

Excellent, it's been rumored that they would create a high speed rail line but now it's official. I've counted $730 billion of foreign investment deals in to Russia from China in 2013-14 alone, but with this announcement that raises the total FDI deals from China to $960 billion, and the second LNG pipeline will likely bring that number well over a trillion Dollars. What's also rumored is that Russia and China may develop a joint aerospace defense network, similar to what Russia proposed with NATO with it's anti-Russian European Missile (Meat) Shield, which failed might I add. If Russia and China jointly develop a series of criss-crossing fast rail networks, than they can also create a underground aerospace defense network and use the construction as perfect cover
to disguise it.

...But back to the economic question at hand. Now the question remains, can we really still trust Western ratings agency's? According to them Russia is losing blahblahblah amounts of FDI from capital outflow, meanwhile Russia nearly struck a trillion dollars of FDI deals with China, combined with the fact that those same ratings agency's played a pivotal role in causing the 2008 economic panic, I think it's time to stop paying attention to them all toghether! I also would like to hear sepheronx, and kvs chime in on this.

Well, the railway plan isn't signed yet. But it will eventually, just like the second gas deal, the LNG deal and various others. Reason why is that eventually China will end up losing more and more of the Western European and US market and will rely on the asian, Eastern EU and Caucuses market, which in this case, Russia is very important for that type of trade. And thus, China will have to go through Russia. They know that once they have the Russian market, they will have a ton of influence on Russia and Russian allies which will be beneficial to its development (especially when Russia is looking towards Africa and Latin American economically). As for rating agencies, it was S&P who screwed up the eocnomic markets of the world in 2008. Rating agencies are pointless these days and it has been mentioned that any ratings being downgraded over Russia in the last month is purely political and nothing else.

Exploration Germany: Russia can withstand years of Western sanctions

MOSCOW, Oct. 20 - RIA Novosti. German intelligence service BND estimates that Russia will be able to resist Western sanctions for several years, according to Deutsche Welle , with reference to Bild am Sonntang.


Thus, according to German intelligence, cash reserves in Russia are currently estimated at 619 billion dollars, which is 162% of the amount of public expenditure for the current year. This means that Russia could only live for these funds for 20 months.


BND also believe that due to the low public debt (13%) and large cash reserves, Russia can withstand the effects of the sanctions without much harm to the economy of the country for four years.


According to data of the Central Bank of the Russian Federation on 1 October 2014 Russia's international reserves amounted to more than 454 billion dollars.

Russia can survive indefinately from western sanctions since it has a strong industrial base. Second to Germany.

Actually, Russian industries are now seeing record profit thanks to these sanctions.

Iran lasted years with sanctions on them, without a strong industrial base. Like mentioned above, tooling industry is now going to be developed.

These groups are trying to make it sound like they are more important than they really are.

http://en.itar-tass.com/world/755434

So according to the Pollacks, EU will mot soften samctions against Russia till it "changes its stance". Whatever that means. The more they do this, especially when Russia agreed to all these demands, that they are nothing more than trying to pressure Russia to give up Crimea. What a joke. The EU knows that they are gonna lose out the Russian market in the end, and Russia will make it harder for EU to gain other markets, all the while Russia sets up its own currency borrowing system, and Russia will have more hostile policies towards EU. This also comes at a time where EU countries have major economic issues and adding in having to take care of the nations in EU whom are greatly underperforming, may not been best to piss off the people you rely sales on.

It is easy for Poland to talk smack as they are a heavily underdeveloped country with only agri trade with Russia. But according to some people on zerohedge, there are companies and people in the more significant countries whom are major pissed at the governments for screwing up their business with Russia.

The EU is a one dog show:  http://bilbo.economicoutlook.net/blog/?p=29245



Note the drop in German production this year.  That is thanks to the sanctions on Russia.  The idiots.

lol, moody's dropped Russia's rating thus lowering the Ruble value again. Once again, these credit agencies are pointless.

sepheronx wrote:lol, moody's dropped Russia's rating thus lowering the Ruble value again.  Once again, these credit agencies are pointless.

They may be worthless (more so when they are controlled by the US Gov.), but credit agencies have a lot of power within economic markets. As you said, Moody's made the Ruble drop (just a bit) despite their obvious idiocy. Just like how the retarded investment agencies have power over the stock market, all they have to say is (blank) and a (blank) income will result from it. The Market doesn't care if it is complete crap, all that matters is who says what! A great example, is AMD stock (which I owned for a couple years and sold last year)... They were (and are) completely undervalued by the market, not because of their businesses faults, but because the investment groups hated them. I remember one time Goldman dropped their rating to a sell and gave them an estimate of under $3 (they were $4+ at the time) and they dropped something like 50 points in two days. Of course they went back up but you get the idea. These agencies might be pointless (not to whomever runs them), but they still hold the cards as far as I'm concerned!

Mike E wrote:

sepheronx wrote:lol, moody's dropped Russia's rating thus lowering the Ruble value again.  Once again, these credit agencies are pointless.

They may be worthless (more so when they are controlled by the US Gov.), but credit agencies have a lot of power within economic markets. As you said, Moody's made the Ruble drop (just a bit) despite their obvious idiocy. Just like how the retarded investment agencies have power over the stock market, all they have to say is (blank) and a (blank) income will result from it. The Market doesn't care if it is complete crap, all that matters is who says what! A great example, is AMD stock (which I owned for a couple years and sold last year)... They were (and are) completely undervalued by the market, not because of their businesses faults, but because the investment groups hated them. I remember one time Goldman dropped their rating to a sell and gave them an estimate of under $3 (they were $4+ at the time) and they dropped something like 50 points in two days. Of course they went back up but you get the idea. These agencies might be pointless (not to whomever runs them), but they still hold the cards as far as I'm concerned!

When it comes to dealing with the entities that these rating agencies deal with, of course they hold power. But if Russia ends up refusing to deal with them and sell by their own standards, the rating agencies can put Russia on any negative rating but wont mattet in the end anyway. We are starting to see this with trade amongst domestic currencies between Russia and China. If Russia pushes for this style trade between egypt and Russia or Venezuela and Russia, they can determin how they perceive each others currency. So far, specifically for industrial companies like defense and metallurgy, keeping the trade where they compare Ruble to USD because with lower value means it is cheaper for other countries. Becomes a problem for import companies and products that are not made at home.

Still waiting for Chinese and BRICS rating agencies. Then the rating agency market will be chaotic.

Looks like Viktor Orbán and the other Russia-friendly Hungarians are being attacked by the U.S., with the totally politicized corruption charges that are indirectly targeting Orbán:

Hungary not investigating US corruption claims

US Cancels Visas for Hungarian Officials Over Corruption Allegations



According to local media reports, the entry ban could target people associated with Hungarian Prime Minister Viktor Orban

MOSCOW, October 18 (RIA Novosti) – The United States imposed sanctions against some Hungarian officials and businessmen over their alleged involvement in corruption, Deutsche Welle has reported, citing US charge d'affaires of the US Embassy in Budapest Andre Goodfriend.
The diplomat did not name the corruption suspects, who were denied entry visas to the United States.

According to the local media reports, the entry ban could target people associated with Hungarian Prime Minister Viktor Orban and be a response to Hungary's rapprochement with Russia.
The United States and its allies have already imposed several rounds of economic sanctions against Russia, accusing it of supporting independence fighters in southeastern Ukraine.
Earlier on Thursday, Hungarian Foreign Minister Peter Szijjarto said he sanctions imposed against Russia by the West are not helping in resolving the situation in Ukraine and are hurting the economies of EU member-states.

Russian President Vladimir Putin repeatedly stated that Western sanctions undermine economic stability in the world and hurt not only the target country but also those using the measure.

http://en.ria.ru/politics/20141018/194269985/US-Cancels-Visas-for-Hungarian-Officials-Over-Corruption.html

Political blackmailing to change a more aggressive Anti russian stance nothing more.

If those idiots would actually give a f*ck about corruption they would have starting to jail oligarchs in US like the banksters, majority of MIC that uses money for other purposes than intended, energy sector, pharma sector and the private owned prisons that are commiting tax evations, but no, they apply all legal and moral high ground they grant themselfs and use it on others and...USA main export hypocrisy and terrorism.