Russia’s economy contracted 2.1% last year, defying the worst fears of a major recession as surging commodity exports helped offset the impact of US and European sanctions imposed over President Vladimir Putin’s invasion of Ukraine, Bloomberg News reported. The preliminary result was better than the 3% decline officials expected as recently as the early fall and far short of the 10% drop some forecasters saw when the sanctions first hit just over a year ago.
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A Russian scheme to grant loan payment holidays to troops fighting in Ukraine, and for banks to write off the entire debt if they are killed or maimed, has added to growing pressure for the remaining overseas lenders in Russia to leave, Reuters reported. Almost a year since Moscow launched what it calls a "special military operation" in Ukraine, a handful of European banks, including Austria's Raiffeisen Bank International and Italy's UniCredit, are still making money in Russia.
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The European Union is floating a plan to cap the price of Russian diesel at $100 a barrel — a level that might help to stave off the very worst effects of a fuel-imports ban that the bloc will impose on Moscow in just 10 days’ time, Bloomberg News reported. The EU’s executive arm is considering cap levels after the Group of Seven nations offered a price range based in part on the existing cap on Russian crude oil. The thresholds are expected to apply from Feb. 5, the same date as the EU will ban almost all imports of refined Russian products as punishment for the nation’s invasion of Ukraine.
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U.S. authorities designated cryptocurrency exchange Bitzlato Ltd. as a primary money-laundering concern and charged its founder for allegedly facilitating money laundering for criminals, the Wall Street Journal reported. The Treasury Department designated Bitzlato under a section of the USA Patriot Act, a law used to combat money laundering and terrorist financing, for allegedly laundering illicit funds for ransomware actors based in Russia. This type of action, a rarely used so-called death-knell sanction that cuts off the entity from the U.S.
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The Russian rouble pared losses to gain on Thursday after slumping to an eight-month low against the dollar in early trade, struggling under the weight of expectations that sanctions on Russian oil and gas may limit export revenues, Reuters reported. Despite recovering ground in another volatile session, the rouble has still lost more than 13% to the dollar since a Western price cap on Russian oil exports came into force on Dec. 5. By 0957 GMT, the rouble was 0.8% stronger against the dollar at 71.64 , having earlier touched 72.9175, its weakest since April 27.
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The head of Russia's state-controlled airline Aeroflot called on the Russian government to "balance the interests" of Russian and foreign airlines in order to support the domestic aviation sector, in an interview with Russian news site RBC published on Wednesday, Reuters reported. In the interview, Aeroflot CEO Sergei Alexandrovsky said it is "important that the state balances the interests of Russian and international carriers.
The rouble dived around 3% against the dollar on Tuesday, failing to consolidate a recovery from last week's slide as the market comes to terms with the prospect of lower export revenue in the wake of restrictions on Russian oil, Reuters reported. The rouble lost about 8% against the dollar last week and is on course for a hefty monthly decline after an oil embargo and price cap came into force. The finance ministry has said the recent slump was related to recovering imports.
President Vladimir Putin said on Wednesday that Russia could achieve the goals of what he calls Moscow's "special military operation" in Ukraine without damaging the economy by militarising it, Reuters reported. Speaking at an end-of-year conference of Russia's top military brass, Putin said Russia would improve its military forces steadily and calmly without undermining the quality of social services for the Russian people.
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The rouble slumped to its weakest point in more than seven months against the dollar on Monday and was on course for its biggest single-day drop since July amid fears that sanctions on Russian oil will hit the country's export revenue, Reuters reported. Monday's drop came as Russian President Vladimir Putin visited Belarus, fanning fears in Kyiv that he intends to pressure his ex-Soviet ally to join a fresh ground offensive that would open a new front against Ukraine. The currency also lost 3.8% to trade at 71.71 against the euro , also a more than seven-month low.
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Europe has been hit hard by the fallout from the war in Ukraine, putting its companies on the front line of what has become a war of economic attrition between the West and Russia that is playing out alongside the real war in Ukraine, the Wall Street Journal reported. The U.K. is suffering more than other big countries in Europe, economists say. Inflation is running in the double digits, higher than all of its Group of Seven industrialized peers with the exception of Italy; gross domestic product shrank 0.2% in the third quarter year-over-year, setting the U.K.
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