News From Russia: February 11th, 2009!

RBC, 11.02.2009, Moscow 14:55:40.Russia’s Foreign Minister Sergei Lavrov considers it necessary to extend the U.N. mission’s mandate in Georgia, Abkhazia, and South Ossetia, as he said following today’s Russia-EU ministerial meeting. He added that the new U.N. mandate must reflect the actual state of affairs in the Caucasus region. The mandate’s extension is now being actively discussed both within the United Nations and in the republics, Lavrov stated, adding that the different sides’ positions on the matter were starting to converge. However, the decision must be made by the countries where the U.N. mission will be deployed.

RBC, 11.02.2009, Moscow 13:32:56.Russian credit organizations currently hold over $30bn in correspondent accounts with the Bank of Russia, head of the Central Bank’s financial market operations department Sergei Shvetsov announced during his appointment by the State Duma to the post of a member of the board of directors of the Bank of Russia. According to him, overall, the Russian banking system has sufficient liquidity to honor its commitments. “Banks have excessive foreign exchange liquidity, but not enough ruble liquidity,” Shvetsov said.

RBC, 11.02.2009, Moscow 14:24:58.Russia’s inflation stood at 0.4 percent between February 3 and 9, at 0.5 percent since the beginning of the month and 2.9 percent since January 1, the Russian Federal State Statistics Service (Rosstat) reported today. Meanwhile, inflation amounted to 0.5 percent in the corresponding period of 2008, 2.8 percent since the beginning of the month and 1.2 percent in February.

RBC, 11.02.2009, Moscow 13:40:39.The Bank of Russia’s special representatives will begin working in 30 Russian banks starting in late February 2009, the bank’s Deputy Chairman Viktor Melnikov told journalists today. He indicated that the regulator’s board of directors made this decision in agreement with the government, and the documents to this respect had already been sent to the Justice Ministry for approval.

RBC, 11.02.2009, Moscow 12:04:38.The Bank of Russia has sold $40bn from its international reserves since the beginning of 2009 compared to $70bn in 2008, Sergei Shvetsov, head of the bank’s financial markets operations department, announced at the Russian State Duma today. He pointed out that only 17 percent of the total sum was used outside Russia, while the rest remained within the Russian banking system.

RBC, 11.02.2009, Moscow 10:45:46.The Russian nuclear fuel producer TVEL, the subsidiary of the state corporation Atomenergoprom, has signed long-term contracts with the Indian government’s nuclear energy department for the delivery of fuel pellets to India’s nuclear power plants, Atomenergoprom’s press office reported today. The total value of the contracts exceeds $700m. The deal became possible after the Nuclear Suppliers Group (NSG), a multinational body concerned with reducing nuclear proliferation, lifted restrictions on the supply of uranium, reactors, and nuclear technologies to India.

RBC, 11.02.2009, Moscow 11:07:29.Fundamentally, there are no further reasons for the ruble to weaken, aide to the Russian president Arkady Dvorkovich said at a forum in Moscow. He pointed out that the Central Bank wielded enough money to keep the ruble rate within the set trading band. Furthermore, the corporate sector also boasts sufficient resources to ensure the national currency rate’s stability. The ruble, therefore, will remain at its current level unless commodity prices tumble, Dvorkovich observed. In addition, he predicted that interest rates and inflation expectations would wane shortly, in turn dragging down electricity prices.

RBC, 10.02.2009, Moscow 19:56:28.The Russian stock market closed on an upbeat note, as its leading indices added over 4 percent, fully regaining their early morning losses. The MICEX index ended 4.2 percent higher at 728.01 points, as Norilsk Nickel surged 14.88 percent, Rosneft jumped 8.29 percent, Surgutneftegas rocketed 8.69 percent, and Sberbank soared 6.79 percent. The RTS index finished up 5.92 percent, breaking above a psychological mark of 600 points. Its highest gainers included nearly all blue chips, as Norilsk Nickel rose 13.04 percent, VTB climbed 7.81 percent, Sberbank increased 7.76 percent, LUKoil gained 7.44 percent, Surgutneftegas went up 6.95 percent, and Rosneft leaped 11.43 percent. The trade volume amounted to $9.6m.

RBC, 10.02.2009, Moscow 18:57:51.Most investors have switched from currency speculations to more tangible investments, Abdrei Kostin, president and chairman of VTB’s executive board, said during his meeting with Prime Minister Vladimir Putin. He reiterated that the Russian stock market had been on the rise recently, with VTB shares gaining 6-8 percent over the past two days.

RBC, 10.02.2009, Moscow 15:55:59.Russia will not help the United States negotiate further operation of the U.S. military base at Manas airport in Kyrgyzstan, Russian Ambassador to NATO Dmitry Rogozin told a Moscow-Brussels video conference today. He stressed that the United States must discuss the matter directly with Kyrgyzstan – a sovereign state that has made a sovereign decision. The United States should stop its attempts to use Russia as a mediator in order to resolve disagreements with countries that have become independent states, Rogozin noted.