A panel of investors said on Friday that it expects to hold an auction to settle credit default swaps (CDS) related to Russia's defaulted debt in the first half of September, as it continues to work on the auction setup, Reuters reported. The Credit Derivatives Determinations Committee (CDDC) said the exact date is yet to be determined, according to a statement on its website. The auction, a usual way to settle CDS, was thrown into chaos in June when Washington said its sanctions on Russia imposed a total ban on U.S. entities buying Moscow's debt.
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Factories in Russian-occupied areas of the Ukraine were packed up and moved on trains and trucks, and are being resurrected in the west, the New York Times reported. Manufacturers are creating jobs and hunting for skilled workers. Now closer to Poland — Ukraine’s gateway to Germany and western Europe — the reborn businesses are forging ties with the European Union, which Ukraine hopes to join soon. “The main motivation for them to come here is that they stay in Ukraine,” said Andriy Moskalenko, the deputy mayor of Lviv responsible for economic affairs.
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Swedish furniture giant IKEA has decided to liquidate its Russian unit, limited liability company IKEA Dom, further scaling back its operations after more than a decade-long presence in the country, a corporate record showed on Tuesday, Reuters reported. Scores of consumer brands suspended operations in Russia after Moscow sent tens of thousands of troops into Ukraine on Feb. 24, with H&M, IKEA and Nike among the companies to have announced plans for a permanent exit.
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The Russian economy contracted steeply in the second quarter as the country felt the brunt of the economic consequences of its war in Ukraine, in what experts believe to be the start of a yearslong downturn, the New York Times reported. The economy shrank 4 percent from April through June compared with a year earlier, the Russian statistics agency said on Friday. It is the first quarterly gross domestic product report to fully capture the change in the economy since the invasion of Ukraine in February.
Several major Wall Street banks have begun offering to facilitate trades in Russian debt in recent days, according to bank documents seen by Reuters, giving investors another chance to dispose of assets widely seen in the West as toxic. Most U.S. and European banks had pulled back from the market in June after the Treasury Department banned U.S. investors from purchasing any Russian security as part of economic sanctions to punish Moscow for invading Ukraine, according to an investor who holds Russian securities and two banking sources.
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Several countries in Europe dependent on Russian energy suffered another with confirmation Tuesday that oil shipments have stopped through a critical pipeline, the Associated Press reported. Russian state pipeline operator Transneft said it halted shipments through the southern branch of the Druzhba oil pipeline, which flows through Ukraine to the Czech Republic, Slovakia and Hungary. Transneft cited complications due to European Union sanctions for its action on Aug. 4, saying its payment to the company’s Ukrainian counterpart was refused.
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Russia's economic contraction will deepen in the third quarter of 2022, while its strong current account surplus, the key driver of the rouble's recent rebound, will shrink in the second half of this year, the central bank said on Monday, Reuters reported. Russia's export-dependent economy is plunging into recession after Moscow sent tens of thousands of troops into Ukraine on Feb. 24, triggering sweeping financial and economic sanctions from the West.
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U.S. investors participating in credit-default-swap auctions are allowed to buy Russian sovereign debt, according to new guidance from the U.S. Treasury Department, potentially reducing losses for some investors who sold protection against a Russian default in the years leading up to the war in Ukraine, WSJ Pro Bankruptcy reported.
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European natural gas prices jumped more than 10% on Wednesday after Gazprom PJSC said it will halt another turbine and reduce flows through the Nord Stream pipeline, Bloomberg News reported. The key pipeline will pump 33 million cubic meters a day, or just 20% of its capacity, from Wednesday as another turbine is halted for maintenance, Gazprom said in a statement. The move poses further risks to Europe’s gas supply ahead of winter.
Moving in the opposite direction to much of the rest of the world, Russia’s central bank lowered its interest rate 1.5 percentage points to 8 percent on Friday, taking it even lower than it was before the country invaded Ukraine, the New York Times reported. The bank said inflation, which fell to 15.9 percent last month from about 17 percent in May, was slowing in the country because of “subdued” consumer demand and the strength of the ruble, which reached a seven-year high against the dollar last month. The rate cut was larger than economists had expected.
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