Russia

Russian President Vladimir Putin on Friday endorsed a bill that raises income taxes for the rich, part of efforts to help fill government coffers during the fighting in Ukraine, the Associated Press reported. Putin signed the bill into law two days after it was approved by both houses of parliament. The legislation, which envisages a progressive tax on personal income, is a major change from the flat-rate tax that was widely credited with improving revenue collections after it was introduced in 2001. The new law imposes a 13% tax for incomes of up to 2.4 million rubles ($27,500) a year.

Russia’s central bank Friday left its key interest rate unchanged for the fourth straight meeting, but signaled it may raise borrowing costs to tame a pickup in inflation driven by the diversion of manpower and other resources to sustain the invasion of Ukraine, the Wall Street Journal reported. In 2023, with inflation surging, the central bank raised its key interest rate five times before pausing as inflation appeared to cool. But prices have begun to rise more rapidly over recent months as the war entered its third year.

The economies of central Europe are set for stronger growth this year and next as inflation cools, but Russia’s invasion of Ukraine will continue to cast a shadow over their prospects in the form of higher borrowing costs, the European Bank for Reconstruction and Development said Wednesday, the Wall Street Journal reported. The London-based development bank also noted a surge in Chinese investment in parts of Europe and North Africa last year as businesses sought to avoid barriers to their exports.

Sri Lanka will hand over management of its $209 million Chinese-built airport to two Indian and Russian companies, a cabinet statement said on Friday, as the island nation attempts to reduce losses from its state enterprises. Mattala Rajapaksa International Airport (MRIA), funded by China EXIM Bank, has stoked controversy since its opening in 2013 due to a low number of flights, environmentally sensitive location and persistent financial losses. The airport's management will be handed over to Shaurya Aeronautics (Pvt) Ltd.

Russia kept interest rates unchanged on Friday, shifting toward more cautious guidance as inflation risks from a persistently tight labor market and growing consumer spending limit the central bank’s options, Bloomberg News reported. For the third meeting in a row, policymakers left their key rate at 16%, in line with the unanimous forecasts of economists surveyed by Bloomberg.

The U.S. is drafting sanctions that threaten to cut some Chinese banks off from the global financial system, arming Washington’s top envoy with diplomatic leverage that officials hope will stop Beijing’s commercial support of Russia’s military production, the Wall Street Journal reported. But as Secretary of State Antony Blinken heads to Beijing on Tuesday, the question is whether even the threat of the U.S.

Some western banks have begun lobbying against EU proposals to redistribute billions of euros in interest earned on frozen Russian assets, senior industry sources said, fearing it could lead to costly litigation, Reuters reported. European Union leaders are on Thursday discussing a plan to use up to 3 billion euros ($3.26 billion) a year to supply arms to Ukraine as they try to bolster Kyiv's fight against Russia, which would still own the underlying frozen assets.

Raiffeisen Bank International AG’s protracted efforts to exit Russia faced fresh doubts on Wednesday, sending shares of the lender lower and forcing it to postpone a bond sale, Bloomberg News reported. US authorities are pushing the Austrian bank to drop a plan that would have allowed it to repatriate as much as €1.5 billion ($1.6 billion) stuck in Russia, Reuters reported Wednesday, citing people with knowledge of the discussions. Shares of the lender slumped as much as 16%, prompting it to delay the planned sale of debt securities.

UniCredit faces court hearings in Britain and Russia in the second quarter after a Russian energy company sued the Italian bank for failing to honour guarantee payments because of international sanctions, UniCredit said on Tuesday, Reuters reported. Italian lenders Intesa Sanpaolo and UniCredit still have businesses in Russia, as Western sanctions following the Ukraine conflict curtailed the number of potential buyers and Moscow then passed laws that restrict divestments.