Latest news with #Rosselkhozbank
Newsweek
01-05-2025
- Business
- Newsweek
Russia Warned of Spiking Risk of Run on the Banks
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. Economic turbulence in Russia has raised the chances that depositors will hurry to withdraw their money from banks, it has been reported. Russia's Center for Macroeconomic Analysis and Short-Term Forecasting (CMASF), which is linked to Russia's authorities, has said there has been an increased possibility of "depositor flight" or a run on the banks. The prediction comes amid economic uncertainty amplified by a record-high key interest rate of 21 percent imposed by the Russia's Central Bank (CBR) to curb inflation fueled by high spending on the military amid Vladimir Putin's full-scale invasion of Ukraine. Newsweek has contacted CMASF for comment. A woman walks past an office of Rosselkhozbank in the Moscow International Business Centre on October 3, 2023. A woman walks past an office of Rosselkhozbank in the Moscow International Business Centre on October 3, 2023. ALEXANDER NEMENOV//Getty Images Why It Matters The CBR last week kept its key interest rate unchanged at 21 percent for a fourth straight meeting, to cool rising inflation driven by Moscow's invasion of Ukraine. The central bank said it would keep borrowing costs high for a long time to return inflation to its target of 4 percent from its current level of 10.3 percent. It also warned U.S. tariffs on imports from the rest of the world could push inflation higher, by reducing demand for Russian oil and weakening the Russian currency, the ruble. Within this context, the CMASF forecast noted "geoeconomic instability" could cause a "panic reaction" among depositors akin to other "shocks" such as at the start of the war in a sign of the turbulence faced by Russia's sanctions-hit economy. What to Know In its April report, CMASF said that the probability of systemic liquidity risks or "depositor flight" has increased sharply based on its early warning system which draws on economic indicators. The system establishes that a risk below 0.3 means there is a low probability, while between 0.3 and 0.5, there is an average probability of depositor flight. This risk has increased from 0.27 in February, to 0.6 in April. The current level has only been reached four times, the most recent in March 2022, after the start of Vladimir Putin's full-scale invasion, when Russians withdrew foreign currency worth $9.8 billion, according to Reuters, as Western sanctions spooked consumers. The CMASF said the situation is aggravated by the growing likelihood of an economic downturn due to the ultra-tight monetary policy of the central bank, the key rate of which is accused of stifling lending and investment. It warned of a vicious circle, in which panic among depositors may stimulate banks to further tighten lending to accumulate liquidity to protect against new runs on the banks. In January the CMASF warned of a huge rise in corporate bankruptcies due to the interest rate. What People Are Saying Russia's Center for Macroeconomic Analysis and Short-Term Forecasting (CMASF): "the probability of systemic liquidity risks ("depositor flight") occurring has increased sharply...(due to) increasing geoeconomic instability which could cause panic among depositors. "A similar reaction to external instability took place during shocks in 2014, 2018, 2020, 2022." What Happens Next Russia's economy could face extra pressure with the plunging cost of oil, its lucrative export, which has forced the government to readjust its budget.
Yahoo
01-04-2025
- Business
- Yahoo
ISW: US, Ukraine and Russia unlikely to finalise ceasefire agreement in next three weeks
Analysts at the Institute for the Study of War (ISW) have said that the United States, Ukraine and Russia are unlikely to agree on the terms of a full ceasefire within the next three weeks. Source: ISW Details: US President Donald Trump has spoken of a "psychological deadline" for Putin to agree to a ceasefire. Trump, answering a question about whether there is a deadline for Russian ruler Vladimir Putin to agree to a ceasefire, said that "it's a psychological deadline". Trump added, "If I think they're [Russia – ed.] tapping us along, I will not be happy about it". Finnish President Alexander Stubb said that during his meeting with Trump, he suggested 20 April as a potential deadline for a complete ceasefire. Quote from the ISW: "Russia is unlikely to agree to a 'full ceasefire without any conditions' within three weeks given that Russia has demanded that the West provide some sanctions relief as a precondition for a temporary Black Sea ceasefire." Details: The ISW analysts pointed out that on 25 March, the Kremlin said it would not implement the agreed ceasefire in the Black Sea until the United States lifted sanctions on the Russian state agricultural bank Rosselkhozbank and other financial institutions involved in international food and fertiliser trade. Bloomberg reported on 28 March that Russia was demanding that the European Union reconnect Rosselkhozbank to the SWIFT international banking system as a prerequisite for implementing the Black Sea Agreement. Analysts stressed that Russia wanted to determine whether the United States would meet its demands and encourage European partners to support the easing of sanctions. On 11 March, during talks in Saudi Arabia, Ukraine declared its readiness to introduce a 30-day ceasefire, provided that Russia also adheres to it. Analysts added that Ukrainian and American officials continued to discuss the terms of the ceasefire for three weeks after 11 March. In the analysts' opinion, this indicated that the terms of the ceasefire had not yet been fully finalised. Quote: "It is also unlikely that the United States, Ukraine, and Russia could negotiate the terms of a general ceasefire within the next three weeks." : US President Donald Trump stated on 30 March that there is an unspecified "psychological deadline" for Russia to agree to a general ceasefire. Russian officials continue efforts to undermine the proposed US-Ukrainian mineral deal by promoting potential US-Russian rare earth mining projects. The Kremlin continues efforts to sow division between the United States and Europe. Ukraine's European allies continue to provide financial and military aid to Ukraine. Ukrainian forces recently advanced near Toretsk. Russian forces recently advanced in Kursk and Sumy oblasts and near Kupiansk, Kurakhove and Velyka Novosilka. Russia is reportedly struggling to restore what few tanks remain in its stocks. Support Ukrainska Pravda on Patreon!
Yahoo
31-03-2025
- Business
- Yahoo
Russia's Black Sea ceasefire demands are a 'fools errand' for Trump, major blow for Ukraine
With much fanfare, the U.S. on March 25 announced it had brokered an agreement between Russia and Ukraine to "eliminate the use of force" in the Black Sea after two days of talks in Saudi Arabia. But while Kyiv said it was ready to abide by it straight away, Moscow stalled, insisting the U.S. lift some of the sanctions imposed on it since the start of its full-scale invasion of Ukraine. The Kremlin has innocuously framed its request as a badly-needed boost to its global food and fertilizer trade, largely in the hands of several Russian agro-oligarchs. But experts and officials who spoke to the Kyiv independent said lifting sanctions could in fact help line the pockets of both Russian oligarchs and Moscow's war machine, as well as putting pressure on what has so far remained a largely unified Western sanctions response to Russian aggression. "Any easing of sanctions directly benefits the system fueling Russia's war," a Ukrainian official who works on sanctions told the Kyiv Independent under the condition of anonymity because he wasn't authorized to comment on the issue. "It's impossible to separate Russian oligarchs from their chemical assets — especially fertilizer plants — which are deeply intertwined with the Russian military-industrial complex," they added. When announcing the ceasefire deal, the U.S. said it would "help restore Russia's access to the world market for agricultural and fertilizer exports," but did not provide further details of how this could happen, or if it would involve the lifting of sanctions. Russia's main demand is to lift sanctions on some financial institutions including the state-owned agricultural bank Rosselkhozbank. In addition, it wants other banks related to agriculture to be reconnected to the Brussels-headquartered SWIFT global banking payment system. Russian banks were disconnected from SWIFT after the start of Russia's full-scale invasion of Ukraine in 2022. Despite the Kremlin insisting Russia's global agribusiness needs the boost from eased sanctions, it is in fact already on the up. "An integral part of the Black Sea initiative is the lifting of sanctions on our banking institutions involved in settlements related to agricultural goods," Kremlin spokesperson Dmitriy Peskov told reporters on March 28, Russian state news agency TASS reported. "If European countries refuse to take this step, it means they are not interested in following the path of peace," he added. Russia is one of the top agricultural exporters globally and its food and fertilizer companies were not sanctioned to ensure global food security. Despite the Kremlin insisting Russia's global agribusiness needs the boost from eased sanctions, it is in fact already on the up. Sanctions have made it harder for the sector to secure insurance for shipping and access to finance and machinery, but this has not majorly impacted their agricultural exports increased by 8% in 2023 compared to 2022, and by nearly 10% in 2024. Fertilizer exports dropped by 27% in 2023 compared to 2022 but increased by 15% compared to 2021. In the last year, Russian fertilizer has become even more competitive, thanks largely to cheap gas, Lilit Gevorgyan, Associate Director, Economics at S&P Global Market Intelligence, told the Kyiv Independent. Despite a 30% tariff on Russian fertilizer imports in the EU, they have become increasingly common in the bloc, making up 25% of the market, according to S&P Global Market Intelligence. Read also: As Ukraine, Russia agree to ceasefire at sea, Moscow's battered Black Sea Fleet is set to get a reprieve Moscow's demands are likely less about boosting its agriculture sector and more about overcoming wider financial sanctions, several experts told the Kyiv Independent. Currently, due to being disconnected from SWIFT, Moscow is reliant on the Chinese banking system, although problems emerged last year when Chinese banks began curbing Russian transactions over fears of losing access to the U.S. dollar. Regaining access to the Western financial system would be a major boon for Moscow as all of its major state-owned banks are sanctioned, so they cannot be used for trade or capital operations. The Kremlin likely picked Rosselkhozbank because of its agricultural lending, which fits its narrative around the deal being important for its agricultural sector. However, the state-owned bank is not limited to agribusinesses. If the sanctions against it are lifted, it could lend to anyone while also being used to circumvent other sanctions, launder money, and receive oil export revenues. Russia "needs to have a large state-owned or state-controlled bank outside of the sanctions perimeter," said Alexander Kolyandr, a non-resident Senior Fellow with the Democratic Resilience Program at the Center for European Policy Analysis (CEPA).'That will generally help Russia to reduce risks and prices of imports, facilitate export, and make capital movements easier,' he added. Additionally, while food and fertilizer companies have not been sanctioned, its agro-oligarch owners, such as billionaire fertilizer tycoon Andriy Melnichenko, one of the most important businessmen in Russia with close connections to the Kremlin, have sanctions on Rosselkhozbank are lifted, they would be able to use the bank to move money, get loans, and make potential investments, funneling money into the pockets of businessmen that have fuelled the Kremlin's war machine. Fertilizer companies in particular have sold chemicals to Russia's military industrial complex, such as Melnichenko's company Eurochem, Reuters has previously reported. Russia also wants to get rid of restrictions on European ports that have prevented its vessels from docking, and wants sanctions lifted on ships flying the Russian flag. This would boost Russia's exports and allow its ships to seek maintenance at EU ports. Moscow's final demand is to allow the import of agricultural machinery, like tractors, which have been banned by the U.S. and the EU. Western machinery could improve productivity and revenue for Russian agribusinesses, meaning more money for their oligarch owners. U.S. President Donald Trump sees sanctions as a negotiation tool and threatened Russia with secondary oil sanctions on March 30 for heel-dragging during the peace process. Despite this, the White House has already said it is mulling over lifting sanctions as part of the Black Sea deal, and noted that some of the sanctions Russia wants lifted belong to the EU, not the U.S. Ukraine's Foreign Ministry spokesperson Heorhii Tykhyi said on March 27 that so far, Ukraine and the U.S. haven't agreed to lift any sanctions on Russia. If the U.S. does heed Moscow's demands, Russia will have access to hard currency and a more productive agricultural sector, Gevorgyan said. "The loosening of sanctions will have the very real effect of immediately helping to feed the defense industrial machine within Russia." In turn, this would benefit the oligarchs that have profited off the war, from stealing Ukrainian grain in occupied territories, to selling chemical products to Russia's military sector. "The loosening of sanctions will have the very real effect of immediately helping to feed the defense industrial machine within Russia," Steven Horrel, non-resident Senior Fellow with the Transatlantic Defense and Security Program at CEPA, told the Kyiv Independent. Horrell adds there is also concern that even the lifting of limited and specific sanctions could undermine the entire sanctions regime imposed by Western nations in their support for Ukraine and fight against Russian aggression. Giving in to Putin now would be a "fool's errand" and a "show of weakness" from the U.S., he said, adding it would also destigmatize Russian companies that have stolen from Ukraine and "reward an aggressor for invading its neighbor." Even if the White House eases restrictions, European countries are likely to continue sticking to their guns. "This may be intended to drive a further wedge between the U.S. and Europe", Taisa Markus, adjunct professor at the University of Illinois College of Law, and visiting professor at Kyiv Mohyla Faculty of Law, told the Kyiv Independent. "Even if the U.S. lifts financial sanctions, so long as EU, U.K. and other sanctions remain in place, Moscow is unlikely to gain meaningful access to the global financial markets, and major American financial institutions are likely to remain hesitant to do business with Russia," she added. Read also: Unless you act, 'it's just rhetoric' — Baltic states skeptical of Western European leadership We've been working hard to bring you independent, locally-sourced news from Ukraine. Consider supporting the Kyiv Independent.
Russia Today
28-03-2025
- Business
- Russia Today
Türkiye open to backing revival of Black Sea Grain Initiative
Türkiye is ready to help revive the Black Sea Grain Initiative, the Kremlin said on Friday, following a phone call between Russian President Vladimir Putin and his Turkish counterpart, Recep Tayyip Erdogan. Originally brokered in July 2022 by the UN and Türkiye, the agreement envisioned the safe passage of Ukrainian agricultural exports to the global markets in exchange for the West lifting restrictions on Russian grain and fertilizer trade. Moscow withdrew from the deal in 2023, citing the West's failure to meet its obligations under the deal. According to the Kremlin, Erdogan 'voiced support for Russian-American dialogue and reaffirmed Ankara's willingness to help facilitate progress on the Black Sea agreement.' On Monday, US and Russian officials agreed to restart the initiative, following 12 hours of talks in Saudi Arabia. Russia requested that its agricultural bank, Rosselkhozbank, and other institutions involved in food and fertilizer sales, be reconnected to the SWIFT international payments system, which had been agreed as part of the original Black Sea Grain Initiative. Moscow cited the West's failure to follow through on that commitment, along with Kiev's alleged misuse of the arrangement for military purposes, as reasons for not renewing the rolling annual agreement in 2023. US President Donald Trump confirmed on Tuesday that his administration is considering lifting some sanctions on Moscow. READ MORE: White House reveals details of US-Russia talks in Riyadh The Kremlin said Moscow and Washington had also discussed steps to ensure safe navigation in the Black Sea, including pledges to avoid the use of force and prevent commercial vessels from being used for military purposes. Proposed measures also include ship inspections. Russian Foreign Minister Sergey Lavrov said in an interview with Channel 1 on Tuesday that Moscow would need firm guarantees from the US to renew the deal. Russia's position now 'is simple: We cannot take anyone's word at face value,' Lavrov said.
Yahoo
27-03-2025
- Business
- Yahoo
Ukraine believes Black Sea ceasefire is in effect, Foreign Ministry says
Ukraine believes that the ceasefire on military action in the Black Sea is in effect but will watch Russia's actions and whether Moscow will comply with the agreement, Foreign Ministry spokesperson Heorhii Tykhyi told journalists on March 27. The U.S., Russia, and Ukraine agreed to "eliminate the use of force" and prevent commercial vessels from being used for military purposes in the Black Sea, the White House announced on March 25, following two-day talks in Saudi Arabia. According to Tykhyi, Kyiv understands that the Black Sea ceasefire applies to civilian shipping and Ukrainian ports, and does not apply to Russian warships. Foreign vessels have previously been damaged in Russian attacks on the port. Over the past year, multiple ships had been damaged in separate attacks on the Odesa port in Ukraine's south. "Russia's movement of warships beyond the eastern part of the Black Sea will be considered a violation of these agreements and will be regarded as a violation of the obligations to ensure free navigation in the Black Sea," the spokesperson added. Separately, Tykhyi added that the Black Sea truce does not concern the Black Sea Initiative, which allowed Ukraine to ship out its grain and broke down in 2023 after Russia's withdrawal from the deal. The spokesperson also said that Ukraine and the U.S. didn't agree on lifting any sanctions from Russia. The Kremlin said the ceasefire would take effect only if Western sanctions on Russian food producers, exporters, and financial institutions — including Rosselkhozbank — are lifted and if Russia is reconnected to the SWIFT payment system. Ukraine has already agreed to a U.S.-proposed full 30-day ceasefire, saying on March 11 that Kyiv is ready to take such a step if Russia also agrees to the terms. So far, Russia has refused, instead attempting to extract major concessions from the U.S. in exchange for partial ceasefire agreements. Read also: As Ukraine-Russia ceasefire progress inches forward, here's where things stand We've been working hard to bring you independent, locally-sourced news from Ukraine. Consider supporting the Kyiv Independent.
