Russia 091125 Basic Political Developments
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- Reuters: Too early for Russia to end stimulus –Kudrin
- Reuters: Russia Kudrin says Moscow exchanges overheated
- Prime-Tass: Deputy PM sees gradual retraction of govt stimulus
- Dow Jones: Russia To Raise Forex Interventions Within Ruble Trading Band
National Economic TrendsNOVEMBER 25, 2009, 2:00 A.M. ET WSJ: Crisis Will Continue For 1-2 More Years In Russia - Kudrinhttp://online.wsj.com/article/BT-CO-20091125-701280.html MOSCOW (Dow Jones)--The effects of the financial crisis could be felt in Russia for another one to two years, Finance Minister Alexei Kudrin said Wednesday. He added that demand for oil--Russia's biggest export--has fallen catastrophically, and said he expects the price for crude oil to be between $60 and $70 a barrel for the next few years. -By Will Bland, Dow Jones Newswires; +7 495 937 8445; william.bland@dowjones.com Reuters: Too early for Russia to end stimulus –Kudrinhttp://www.forexyard.com/en/reuters_inner.tpl?action=2009-11-25T064848Z_01_GEE5AO02O_RTRIDST_0_RUSSIA-KUDRIN-URGENT MOSCOW, Nov 25 (Reuters) - Russia should be in no hurry to end economic stimulus measures, Finance Minister Alexei Kudrin told a conference on Wednesday. "The crisis will continue for another one-two years despite renewed economic growth," he said. "It is too early to exit from (stimulus) packages, we need to maintain demand. The situation has not stabilised yet". (Moscow Newsroom, + 7 495 775 12 42) Reuters: Russia Kudrin says Moscow exchanges overheatedhttp://www.forbes.com/feeds/afx/2009/11/25/afx7157416.html 11.25.09, 02:34 AM EST MOSCOW, Nov 25 (Reuters) - Russian Finance Minister Alexei Kudrin on Wednesday said local stock markets have become overheated by inflows from speculative international investors. 'We, like many other markets, have received a large volume of short-term speculative money from the world markets. They have arrived, they are among us, and the index is inflated, it is overheated,' he said. (Reporting by Alfred Kueppers) Keywords: KUDRIN/STOCK MARKET (alfred.kueppers@thomsonreuters.com; Tel +7 495 775 1242; Reuters Messaging: alfred.kueppers@thomsonreuters.com@reuters.net)
MOSCOW, Nov 24 (PRIME-TASS) -- Russian First Deputy Prime Minister Igor Shuvalov said the government's retraction of the stimulus program would be a gradual phase-out, rather than an abrupt termination. "The government has a plan for pulling out of this stimulus program but it should not be short-term and fast and we should do it gradually," he said. Shuvalov also said the economy was expected to transition into sustainable growth next year, and described the economic situation as stable and positive. Dow Jones: Russia To Raise Forex Interventions Within Ruble Trading BandWed, Nov 25 2009, 08:01 GMT http://www.djnewswires.com/eu MOSCOW (Dow Jones)--Russia plans to gradually increase its intervention in foreign currencies within the moving trading corridor that it has set for the ruble and the euro and dollar, the Russian central bank's Deputy Chairman Alexei Ulyukayev said Wednesday. Ulyukayev said earlier this month the ruble's floating trading band against the euro/dollar basket was between RUB35 and RUB38. The dollar has a weight of 55% in the basket, while the euro weight is 45%. -By Ira Iosebashvili, Dow Jones Newswires; +7 495 937 8445; ira.iosebashvili@dowjones.com Bloomberg: Russia to Cut Rates Further to Stem Hot Capital, Ulyukavey Says http://www.bloomberg.com/apps/news?pid=20601087&sid=ajBpA9DJFmac&pos=4 By Alex Nicholson and Paul Abelsky Nov. 25 (Bloomberg) -- Russia’s central bank will continue to cut interest rates as policy makers try to prevent speculative capital from destabilizing the currency, Bank Rossii First Deputy Chairman Alexei Ulyukayev said. Russia needs to keep cutting rates to stem the use of the ruble as a vehicle for the carry trade, and after the economic decline removed inflation risks, Ulyukayev said at a conference in Moscow today organized by Vedomosti. The bank yesterday lowered the benchmark refinancing rate to a record low 9 percent in the ninth reduction since it started easing in April. Ulyukayev said today the bank will be “more active” in using currency transactions to steer the ruble within a “floating” corridor of 35 to 38 against a target basket of dollars and euros. The bank said in October it will also use interest rates to manage the currency. The crisis has shown that the economy of the world’s biggest energy exporter is “extremely vulnerable” to external events, Ulyukayev said. The bank will also continue to cut interest rates as it sees “no inflationary risks” next year with a rate “much lower” than 9 percent, Ulyukayev said. Inflation slowed to an annual 9.7 percent in October, the lowest rate in two years. Russian equity funds drew record amounts at the end of October, according to EPFR Global. The ruble is the second-best performer among emerging market currencies after the Chilean peso in the past three months, having gained 8.7 percent in the period, Bloomberg data show. The ruble gained even after Russia bought foreign currency, raising reserves to $441.7 billion as of Nov. 13, compared with a low of $376.1 billion on March 13, central bank data show. ‘Overheating’ Finance Minister Alexei Kudrin said today that speculative capital has left Russian stocks overvalued, leading to a threat of “overheating.” The Micex Stick Index of Russia’s 30 most liquid stocks has gained 116 percent this year. Interest in Russian assets has picked up following this year’s 80 percent rise in the price of Urals crude. Energy products make up about 70 percent of Russia’s export revenue. Russia, which has the fourth-highest benchmark interest rate in Europe after Ukraine, Iceland and Serbia, is the only member of the four so-called BRIC nations still cutting rates. “In terms of nominal interest rates Russia is still offering the highest yields in the emerging market space and in an environment where oil prices are remaining relatively well supported we think that the ruble will continue to be seen as an attractive way to position for global recovery,” Manik Narain, an emerging markets strategist at Standard Chartered Bank Plc in London said yesterday. For Related News and Information: Top economy stories: TOP ECO "Today we have 25 November and a year later I was ready to make a bill raising the minimum capital of banks up to 1 billion rubles ... a term of five years", - Kudrin said at the forum of the newspaper Vedomosti. NOVEMBER 25, 2009, 3:52 A.M. 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