Russia

As Russia faces another round of payments on its sovereign debt, Biden administration officials are weighing whether forcing Moscow into default for its invasion of Ukraine would really be the best outcome, Bloomberg News reported. Treasury Secretary Janet Yellen said Tuesday that the matter is being “actively examined” before a crucial deadline in two weeks, and a decision will be made shortly.

Italian Prime Minister Mario Draghi said on Wednesday he was confident Moscow's demand that European buyers pay for Russian gas in roubles will not lead to a disruption of supplies, Reuters reported. The European Commission has warned that complying with Russia's scheme might breach EU sanctions, but Draghi said it was a "grey zone" with no official ruling on the matter. Speaking during a visit to the United States, Draghi said he was "quite confident" about the supply situation for "a silly reason" that there was a lack of clarity on the rules after Russia's invasion of Ukraine in February.

An abrupt halt of Russian gas exports could see economies in emerging Europe, central Asia and north Africa slide back to pre-pandemic GDP levels, the European Bank for Reconstruction and Development (EBRD) warned on Tuesday, Reuters reported. Many countries in the EBRD's region of operation, which covers some 40 economies stretching from Mongolia to Slovenia and Tunisia, depend on Russian gas and a sudden ceasing of supplies would lower output per capita by 2.3% this year and 2% in 2023, according to the lender's latest report.

Russia is facing the deepest economic contraction in nearly three decades as pressure from sanctions imposed by the U.S. and its allies mounts, according to an internal forecast by the Finance Ministry, Bloomberg News reported. Gross domestic product is likely to shrink as much as 12% this year, deeper than the 8% decline expected by the Economy Ministry, according to people familiar with the estimates who spoke on condition of anonymity to discuss internal deliberations. The government hasn’t released a public forecast since the invasion of Ukraine.

The European Union is closing in on agreeing a sixth package of sanctions against Russia, a German foreign ministry spokesperson said on Monday, Reuters reported. "Talks on the sixth sanctions package are ongoing, they are well advanced and from our point of view they could be concluded soon," the spokesperson told a regular government news conference in Berlin. Read more.

The EMEA Credit Derivatives Determinations Committee said on Friday it closed the case looking into whether credit default swaps would be paid to holders of Russian debt after Russia paid its obligations, Reuters reported. Russia last week avoided a default, announcing it had paid nearly $650 million it owed in coupons and principal to holders of two bonds, ahead of a grace period expiry on May 4. The payments had initially been made in rubles, potentially breaching the contract, which triggered the opening of the CDS case.

Russia's top lender Sberbank is developing fully domestic cloud infrastructure, it said on Friday, after reporting issues with some 'smart home' device functionality due to problems with its foreign cloud partner, Reuters reported. The state-owned lender, which fell under Western sanctions imposed over Russia's actions in Ukraine, has been developing its non-financial businesses, including technology and cloud services, in an attempt to combat the industry-wide trend of shrinking margins.

The Russian rouble briefly reached its highest level against the dollar since March 2020 on Thursday, supported by capital controls, while stock indexes also climbed as the market watched developments around possible new sanctions against Moscow, Reuters reported. The volatile currency hit a high of 65.31 per dollar in early trading on the Moscow Exchange but by 1339 GMT was at 66.14, which was 0.2% stronger than its Wednesday closing level. The morning peak level had not been seen since the onset of COVID-19 pandemic.

The European Union's executive on Wednesday proposed the toughest package of sanctions yet against Moscow for its war in Ukraine, but several countries worried about the impact of cutting off Russia oil imports stood in the way of agreement, Reuters reported. The new punishments, announced by European Commission President Ursula von der Leyen, included sanctions on Russia's top bank and a ban on Russian broadcasters from European airwaves, as well as the embargo on crude oil in six months.

A Dutch court ruled that Microsoft Corp. must allow bankruptcy trustees appointed to the Russia-linked Amsterdam Trade Bank to access to its data or face fines, Bloomberg News reported. The technology giant risks daily fines of 10 million euros ($10.5 million), with a maximum penalty of 100 million euros, if it doesn’t comply with the ruling, court-appointed trustee Job van Hooff said by phone late Tuesday. ATB, a lender linked to Russia’s Alfa Group, was declared bankrupt last month in the Netherlands after U.S. and U.K. sanctions paralyzed its payment systems.