Russian Economy General News: #12

In the long term Russia might try to make a recycling mechanism where Europeans can buy energy with ruble denominated debt they hold. So this won't be just a cosmetic move. It will basically break the currency sanctions mechanism. Well some of it. Not all.

The sanctions are already broken, to begin with.
In reality, they have never been effective, just from the beginning.
You can't sanction 1/5th of a planet.
Especially, if 2/3rd of the planet's population does not comply and share your opinion on the matter.
I repeat it again and again : the collective west fell a victim of its own lies and propaganda.
They have underestimated the role of the Russian economy for so long, overestimating their own, that not only do they really believe in that.
This belief made them incapable to understand the nature of it.
If one would consider that from a wider perspective, this situation is actually known and obvious for a long time.
US is incapable of effectively working with Russia because it does not have skilled diplomatic and intelligence assets in its hands.
"Young" cadres were educated and skilled to operate in the Asian direction, while the people involved in spying on the Soviet Union are gone for years.
Underestimating the role of Russia after 1991, dismantled the whole structure. Russian factor was not fancy enough to guarantee a career in structures.
The thing and its follow-up, is clear to anyone who knows how the bureaucracy works.
And it worked just perfectly same on the economic direction.
If one is not a European, he would not believe in this madness that we witness for the last 20 years, that only speeded up for the last decade.
European countries were the first in line to dismantle the whole security belt that North African and East regimes were created to cover European asses. And were the very first in line to be hit with the results of it - a migrant crisis.
Among the blind ones, a one-eye is a king.

Gazputin wrote:make EU pay in Turkish Lira
Lira then gets out of the inflation death spiral
and value is restored

Turkey is grateful and richer
and then can buy lots of sanctioned Russian products as their buying power has increased
and pays via local currency swaps - so the transactions are masked

then they re-export them as "Turkish"

making Turkey a gateway to the world for sanctioned Russian products
and vice versa .... procure stuff for Russia it needs/wants

What favours does Russia owe Turkey? Russia has neither favours to repay, nor favours to ask from Turkey. The Turks themselves as a neutral country, while working with both sides. As is their right. But notice that the West isn't hassling them for not sanctioning Russia like they're hassling other countries. Maybe it's just because they don't want to push Turkey away, or maybe it's because Turkey is helping them with some things too; like Bayraktar deliveries.
If Turkey wants the lira strengthened then it's free to agree to currency swaps with Russia and a move to trade in each other's currencies instead of outside ones. That would be great. It can also do the same thing with China, India and in general join the club.

I'm all for the the EU paying in roubles and Putin shouldn't back down on this. Delay it maybe for a little until the Russian position is stronger, but press ahead with it.

Naaah, just extend the list of "friendly countries" that are allowed to pay in whatever they want
Let it be a palm oil
wanna bet who will sign up for a nice, smelly tanker full of oil if can exchange it for the palm one?

The Ruble is gaining on the USD again. Fast. The Russian Central Bank better cut interest rates again.

The UK and Germany should just go back to mining and burning their own coal since they seem to have forgotten how to make nuclear power plants. Instead we hear bogus claims about wind and solar power. Never going to work without 4x energy cost increase. Perhaps those poor people in Wales would also get their jobs as coal miners back. And you know what, coal mines today don't have as shitty working conditions as they used to in the past.

lancelot wrote:The UK and Germany should just go back to mining and burning their own coal since they seem to have forgotten how to make nuclear power plants. Instead we hear bogus claims about wind and solar power. Never going to work without 4x energy cost increase. Perhaps those poor people in Wales would also get their jobs as coal miners back. And you know what, coal mines today don't have as shitty working conditions as they used to in the past.

As soon as European countries learn to play by the same rules as the rest of the world, all the ideological dicombobulations, 'civilized' vs 'non-civilized' will if not disappear; then weaken.
The playing field will be evened and everyone will have to engage in fair trade, mutual investment for the things and resources they need, rather than relying on neo-colonialism

Russian gas & oil is a commodity, not their property. Same goes for Russian-owned pipelines and everything else. If their principles do not allow them to purchase it, if they want to try and weaken Russia by depriving it of revenues - fine. Russia will simply divert its supplies to a booming Asia. And even Japan and South Korea despite all dependency on the US, will not agree to forgo Russian natural resources like the Europeans have done. Japan has already declined to pull-out of the Sakhalin LNG project. It needs that gas. So does South Korea. So does China. Vietnam. India. Pakistan. Thailand. And many more up and coming countries.
Asian industries will boom, while Europe will have to relearn how to mine coal.

The perfumer called the necessary condition for the replacement of foreign products in Russia, by Tatyana Kosolapova for VZGLYAD. 28.04.2022.

For complete import substitution in the Russian perfume market, it is necessary to open at least one plant in the country to create the basis of fragrances, Zhanna Gladkova, a perfumer who created individual compositions for Russian President Vladimir Putin and Chechen leader Ramzan Kadyrov, told the VZGLYAD newspaper.

The French-American cosmetic concern Coty, which includes about 80 perfume brands, including Alexander McQueen, Calvin Klein, Gucci, Hugo Boss, Tiffany, the Max Factor mass market brand and others, has announced that it is curtailing its activities in Russia. This decision was made after careful deliberation, including an analysis of relevant US, UK and other regulations.

“We definitely need to build a couple of factories for the production of perfume composition. In Soviet times, we had them, but in the 90s everything was closed. Now we do not have the opportunity to prepare perfume compositions ourselves, so everything has to be purchased abroad,” says Gladkova.

She emphasizes that there are a sufficient number of perfumers in Russia, there are no problems with the manufacture of perfume liquid. However, the perfume compositions themselves (what is the basis of the fragrance) have to be ordered. Therefore, it is possible to establish fully domestic production in the country, but for this you need to open at least one plant.

“As for the raw materials that are available in Europe, today a lot has been taken to Southeast Asia, where it is also possible to buy it. But, of course, we need factories. With them, we would generally manage without Western components calmly, ”says the specialist.

The creation of a perfume composition is creativity, the expert continues, and there are a considerable number of worthy masters in Russia. Moreover, it is difficult to release a fragrance, but it is even more difficult to sell it. In Europe, according to the perfumer, there is not as much demand for the product as in Russia, so now companies are losing a very large market share.

“When I am abroad and I smell a fragrance from some woman, it is almost 100% our woman. European women practically do not choke. The Russian perfume market is huge compared to the Western one. Therefore, companies that leave because of political issues lose a lot. Of course, they will return later, but we can also improve our production,” Gladkova said.

In order to create a perfume factory, according to the speaker, no fabulous sums are needed. The most expensive thing in a modern factory is equipment in the form of robots, which can be purchased in China. That is, the creation of fragrant compositions comes from a computer: a recipe is laid there and a container “runs” on the conveyor, into which fragrant substances are poured. Thanks to such automation, the human factor is excluded, which is important in perfumery, because the slightest deviation leads to a change in the sound of the fragrance.

In addition, she says that aromas are used not only to create perfumes, but also to flavor household chemicals, candles and other things necessary in everyday life.

Earlier, the press service of Wildberries said that in the first quarter of 2022, the turnover of the marketplace amounted to 289.2 billion rubles, which is 95% more than the same period in 2021. Sales of cosmetics and perfumes grew by 100% to RUB 28.3 billion.

https://vz.ru/news/2022/4/28/1156108.html

GarryB wrote:

and Krasnoyarsk is a great place for a transport hub .... centre of Russia

It makes sense to shift the  Russian population closer to Asia and other country borders too... they are really only going to need protection on the european border from european countries and for trade with Kaliningrad and Crimea and Belarus and any friendly fragments of Ukraine that survive.

in order for a much larger population to live in Siberia, it is necessary to build a giant infrastructure there. And there will still not be the same amount of arable land as in the European part of Russia. Geography determines the population, not someone's desires.
probably, in many ways, a simpler and safer task would be to relocate to the Moon and Mars than to create new megacities in Siberia.

The Central Bank unexpectedly cut the key rate from 17 to 14 percent, 29.04.2022.

The Central Bank of Russia suddenly cut its key rate from 17% to 14%.

The Bank of Russia has lowered its key rate from 17 to 14 percent per annum, the regulator said in a Telegram statement.

"The external conditions for the Russian economy remain difficult and significantly limit economic activity. At the same time, the risks to price and financial stability have ceased to grow, which created conditions for a reduction in the key rate," the message says.

Thus, the latest weekly data, as noted by the Central Bank , indicate a slowdown in inflation due to the strengthening of the ruble and the cooling of consumer activity.

Important indicators for further price dynamics were such indicators as the efficiency of import substitution, as well as the scale and speed of recovery in imports of finished goods, raw materials and components.

According to the regulator’s forecast, the annual inflation rate will be in the range of 18-23 percent in 2022, in 2023 it will drop to five to seven percent and will return to the target of four percent in 2024.

Earlier, the head of the Accounts Chamber , Alexei Kudrin , said that inflation in Russia in 2022, according to the baseline forecast, will be 20.7%, next year - more than six percent.

After the start of the Russian military operation in Ukraine, the West stepped up sanctions pressure on Moscow . Restrictive measures are directed primarily against the banking sector and the supply of high-tech products. Many countries have announced the freezing of Russian assets.

The Kremlin called these measures an economic war, the likes of which have not yet been, but stressed that they were ready for such a development of events. The Bank of Russia took measures to stabilize the situation on the foreign exchange market; payments for gas supplies to unfriendly countries were transferred to rubles. In addition, the government has prepared a plan to support business, the amount of its financing is expected to be about a trillion rubles.

https://ria.ru/20220429/stavka-1786127824.html

Since it's from Reuters, it should be taken with a pinch of salt. However, read between the lines:

Ruble has its highest price against the euro in five years, 16.05.2022.

Reuters - the Russian Ruble firmed above 64 per dollar on Monday (16), briefly jumping to 62.71 against the greenback, and rose to its highest in almost five years against the euro, supported by continued restrictions on currency trading.

The ruble is the world's best-performing currency so far this year, though that's due to artificial support from capital controls Russia imposed to protect its financial sector in late February after sending tens of thousands of troops to Ukraine.

The situation in the domestic currency market has been the same for several weeks, and the ruble remains firm as foreign currency supply exceeds demand, said Alexander Dzhioev, an analyst at Alfa Capital.

Central Bank data showed on Monday that Russia's current account surplus more than tripled from January to April to$ 95.8 billion, driven by higher import revenues and a drop in imports.

"It seems that the breakeven point has not been found so far," Dzhioev said of the ruble rate.

It was not clear whether President Vladimir Putin's demand for gas payments in rubles also supported the currency's rise.

"Current capital control measures have brought the ruble back to pre-pandemic levels," Rosbank analysts said in a note, predicting the ruble would fall to 90 against the dollar by the end of the year.
"In the near future, a new committee on foreign exchange market regulation may adjust these restrictions, but until then, the USD/RUB consolidation may be at the lower limit of the 63.0-70.0 range."

Against the euro, the ruble rose 1.6 percent to 66.05, remaining close to its strongest level since June 2017 of 64.9425, which touched the Moscow Stock Exchange on Friday.

Moscow's standoff with the West and fears of a new package of sanctions to punish Russia for what it calls "a special military operation" in Ukraine are in focus. But its impact is cushioned by the requirement that export-focused companies convert to foreign currency and other restrictions.

"The strengthening of the ruble today may be moderate, but the dollar rate may gradually fall to 62," analysts at Promsvyazbank said in a note.

Russian stock indices rose the most:

The dollar-denominated RTS index rose 3% at 1,165.7 points. The Russian ruble-based MOEX index rose 2 percent to 2,354.1 points.

It is possible that the MOEX index may enter the 2,400-2,500 range this week, Promsvyazbank said.

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https://www.brasil247.com/economia/tublo-tem-cotacao-mais-alta-diante-do-euro-em-cinco-anos