News From Russia: January 30th, 2009!

RBC, 30.01.2009, Moscow 18:34:58.The Russia-Belarus Union State’s leadership believes that the union’s anti-crisis plan will prevent the Russian and Belarusian economies from slipping below the 2008 level, Belarusian Prime Minister Sergei Sidorsky said during a meeting of the alliance’s council of ministers in Moscow today. He stressed that the plan enabled the union’s GDP not only to remain at the same level, but also possibly even grow a bit. The draft plan for minimizing the effects of the global financial turmoil is the main item on the council of ministers’ meeting agenda, Sidorsky stated, adding that the parties had agreed on almost the entire document. “We are close to signing the document,” the Belarusian PM concluded.

RBC, 30.01.2009, Moscow 18:04:08.The Communist Party of Russia questions the government’s ability to get the country through the economic crisis, Yury Maslyukov, chairman of the State Duma industry committee, concluded on behalf of the party’s faction after the ministers’ meeting with MPs. He said that Russia had wasted the time it could use to diversify its economy, and it could only hope now that the ongoing crisis would be over within three years’ time. He also noted that fighting inflation with monetary measures was not a productive solution for the economy, as it only resulted in the high value of money and diverted some money into speculative transactions.

RBC, 30.01.2009, Moscow 15:00:40.The Central Bank has sold all its securities of the troubled U.S. mortgage agencies Fannie Mae and Freddie Mac, the bank’s Chairman Sergei Ignatyev told journalists in the Russian State Duma today. “We have sold everything, earned some money, and lost nothing,” he stated.

RBC, 30.01.2009, Moscow 14:45:58.The Central Bank does not rule out the possibility of a new wave of the crisis erupting in the banking sector, the bank’s Chairman Sergei Ignatyev told the Russian State Duma today. He noted that although such a risk was unlikely in the near term, it was still fairly possible in the foreseeable future.

RBC, 30.01.2009, Moscow 13:40:48.Given the current ruble exchange rate, Russia’s exports may exceed imports by more than $20bn, chairman of the Bank of Russia Sergei Ignatyev said at the State Duma today. He reiterated that the Central Bank had set the upper end of the basket of two currencies, the dollar and the euro, at RUB 41, or roughly at 36 RUB/USD. At the same time, the actual ruble exchange rate against the dollar is estimated to be lower than RUB 41, he stated.

RBC, 30.01.2009, Moscow 12:57:18.Expert estimates show that the crisis will last for three years, with 2009 regarded as the hardest of those three, First Deputy Prime Minister Igor Shuvalov told the State Duma today. With this in mind, the economy should be restructured and the reserves Russia has accumulated over time should be used reasonably, Shuvalov stressed. He warned deputies against Russia’s loyalty to its old economic structure until the end of the crisis, while its G8 partners are upgrading their economies and learning lessons from the meltdown.

RBC, 29.01.2009, Moscow 19:31:49.The government may be involved in bailouts of bad debts subject to certain conditions, head of the Federal Financial Markets Service Vladimir Milovidov said during a meeting with members of the National Association of Pension Funds. He explained that the government could buy out some defaulted bonds if it is proven that the situation arose out of objective reasons, and not through the issuer or underwriter’s blunders or deliberate actions.