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[Quote of the Week] “We can say that risk appetite is returning.”
Posted on August 21st, 2009 Comments welcome Share/Save PrintOn August 20, First Deputy Chairman of the Central Bank of Russia Alexei Ulyukayev offered an upbeat outlook for the ruble against foreign currencies. “Exiting the crisis means lower demand for safer assets and increased demand for riskier, more profitable ones,” he added. Ulyukayev noted that he supported indications that the dollar will weaken against the ruble in the short term as soon as risk appetite returns. That same day, the CRB announced that Russia’s international reserves had declined by $2.8 billion to stand at $400.6 billion during the week ending August 14.
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A Rallying Ruble
Posted on May 14th, 2009 Comments welcome Share/Save PrintLast autumn the wisdom of Russia’s managed devaluation was almost unanimously questioned by economists. But a few months on the approach seems to have paid off - on Wednesday the ruble reached a four month high of 31.9328 per dollar, gaining 13% since January and avoiding a sharp devaluation that would have spooked the population with memories of the 1998 crash.
Russia’s Central Bank (CBR) is optimistic that this upward trend will continue. In an interview with Bloomberg, CBR First Deputy Chairman Alexei Ulyukayev predicted that the ruble will gain more than 6% this year against the dollar-euro basket used to manage its swings. Sergei Shvetsov, Head of Financial Market Operations at the CBR, added that the ruble will be bolstered through the end of the year because Russians will start selling the foreign currency they have been hoarding since the start of the crisis - a whopping $70 billion.
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Putin’s First Annual Address to the State Duma
Posted on April 7th, 2009 1 comment Share/Save PrintYesterday Vladimir Putin delivered his first annual address to the Duma as Prime Minister.
Key Take-Aways
- 3 trillion ruble ($90 billion) aid package to ensure Russia survives a “very difficult 2009.”
- Inflation will soon begin to fall from the current annual rate of 14%.
- Tax burden should be kept low during the crisis.
- Government will reject calls to freeze electricity, gas and rail tariffs.
- Russian companies should take responsibility for reducing their own debt burden rather than relying on the state for bailouts ($174 billion of corporate debt had been repaid or restructured over the past few months).
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Rents Asunder: The Bursting of Moscow’s Real Estate Bubble
Posted on April 3rd, 2009 1 comment Share/Save PrintBy Dom Bartkus, Intern, The PBN Company, Washington DC
With a mighty gust, Moscow’s global real estate bubble has burst. The average price of a Moscow apartment rose by more than 50% in the two years up to the middle of 2008, and the residential rental market also increased sharply gaining 36.5% in the same period. In the last few months, however, residential rents have begun to fall and renters who are not in financial trouble are taking advantage of falling prices by finding a better apartment at a lower price.
Interestingly, rents are falling while demand for properties is increasing. The demand for residential rental properties grew by 46.6% in January, according to real estate company Miel-Arenda. There are a number of contributing factors: many existing leases ended in January, many potential buyers have decided to rent due to the economic uncertainty and many tenants have started looking for more affordable accommodation.
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Government Presents Budget Seeking Consultation and Consensus
Posted on March 20th, 2009 Comments welcome Share/Save PrintYesterday Russian Prime Minister Vladimir Putin formally presented Russia’s revised 2009 budget, based on $41 oil and 13% inflation. It sets out 9.7 trillion rubles ($291 billion) in spending, including 1.6 trillion rubles (nearly $500 million) for an Anti-Crisis Action Plan. The anti-crisis measures are focused on 7 priority areas:
- Improving social welfare
- Maintaining industrial capacity
- Boosting domestic demand
- Promoting small business
- Tackling corruption
- Shoring up the financial system
- Laying the foundation for long-term development
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Russia’s IPO Market: What the Experts Think
Posted on March 5th, 2009 Comments welcome Share/Save PrintPBN had an impressive array of investment bankers and capital markets experts at its launch today of IPO Pioneers 4, which was held at the Institute of Contemporary Development, a Moscow-based think tank. Here are some of their predictions and insights about capital market activities in Russia, Ukraine and the CIS: Read more »
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Policy Matters: Russian Government Alters Anti-Crisis Plan
Posted on March 2nd, 2009 Comments welcome Share/Save PrintBy Blake Marshall, Senior Vice President & Managing Director - Government Relations, The PBN Company
Russians returned from the long holiday season in January with a new comprehension of the depth and breadth of the Russian economic crisis. A crisis that started in the Russian financial markets and corporate world is being felt in early 2009 in the “real world,” with mounting unemployment, declining rubles and rising prices.
Russians also returned to a more candid and forthright government, which laid out a sober assessment of the economic crisis and provided details about the government’s plans for addressing it. President Dmitry Medvedev’s recent television address to the nation, for some reminiscent of Roosevelt’s fireside chats in the U.S., was an important first step in reassuring the Russian public about the government’s handling of the crisis. Read more »
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