Russian news: July 25th, 2008!

RBC, 24.07.2008, Moscow 12:59:50.Venezuelan President Hugo Chavez’s proposal that Russia set up a military base in Venezuela, combined with information released this week on the possible deployment of Russian bombers in Cuba, may provoke an overly negative reaction from the US, the RBC Daily newspaper reported today. Washington may fail to understand the intricacies of Moscow’s diplomatic game, in which Russia seeks to receive an additional trump card in an attempt to decide in its favor the issue of the deployment of US missile shield elements in Eastern Europe.

RBC: Russia’s gold and foreign exchange reserves stood at $588.3 billion as of July 18, 2008, $10 billion, or 1.7 percent, more than a week before.

Over the previous two weeks, the reserves rose by $14.8 billion. From June 27 to July 18, they increased by $24.8 billion, or 4.4 percent.

The fast rise could be due both to the dollar’s depreciation against the euro and the Central Bank’s increased acquisition of foreign currency on Russia’s forex market, bringing the reserves to their highest level ever recorded.

From July 1, 2008, the Central Bank started assessing foreign securities in the reserves based on their market value. Earlier, the assessment was based on amortized value (purchase price plus interest). In doing this, the Central Bank has brought its reserve valuation system in line with international standards.

Currently, China has the largest gold and foreign currency reserves in the world, largely thanks to its huge trade surplus, fed by its growing exports to the United States.

Gold and foreign currency reserves are highly liquid financial assets controlled by the Central Bank and the Finance Ministry. They consist of monetary gold, special drawing rights, the reserve position in the International Monetary Fund, and foreign currency.

RBC: Russia has responded to Washington’s plans to deploy a missile defense system in Eastern Europe. Russian bombers have landed in Cuba, Izvestia newspaper reported citing a source with Russia’s Defense Ministry. The planes made reconnaissance flights and inspected local airfield infrastructure. The return of Russian bombers to Cuba stirred panic in Washington.

Meanwhile, Russian defense officials believe that Tu-160 and Tu-95 strategic bombers could easily be sent not only to Cuba, but also to other locations in Latin America. Apparently, the move is Moscow’s response to the planned US missile shield in Eastern Europe.

The source stressed that reconnaissance flights did not mean that Russian strategic bombers flew to Venezuela and other countries in the region; a visit to an airfield by a transport aircraft is enough to get acquainted with an area.

The news unnerved US officials. Gen. Norton Schwartz, nominated for Chief of the Air Force, told the Senate Armed Services Committee that Russia would be crossing “a red line” if it were to use Cuba as a refueling base for nuclear-capable bombers.

Responding to this warning, Gen. Anatoly Kornukov, former Russian Air Force Commander, said Russian bombers could use foreign airfields, including in Cuba, if governments did not object to this. “Though located very close to the US, they will present no danger whatsoever, just like the US missile defense system in the Czech Republic,” he was quoted as saying by Echo of Moscow radio.

Former Cuban leader Fidel Castro on Wednesday said Cuba did not have to explain or “ask forgiveness” about reports that Russia might use the Caribbean island as a refueling base for its bombers.

In August 2007, Russia made a decision to resume regular strategic flights to parts of the world remote from Russia, including US shores, and such flights require refueling bases along the way.

According to some reports, the Tu-160 and Tu-95 bombers have recently been modernized to carry the Kh-555, Russia’s new conventionally armed air-launched cruise missile with a flight range of over 3,500 km. It is believed that the Kh-555 cannot be intercepted by any existing defense missile system, nor by the missile shield developed by the United States.

RBC, 24.07.2008, Moscow 17:11:41.MegaFon has upgraded its capital investment forecast for 2008 from $1.7bn to $2bn, the Russian mobile service provider said in a statement today. Roughly $250m – $300m of this sum is to be invested in the construction of 3G networks. In 2007, the company invested more than $100m for that purpose.