Fight against the recession: How Russia’s corporations takes a hard line – N24

Fight against the recession: How Russia's corporations takes a hard line – N24

In view of sanctions and the oil price decline of the ruble fell into the basement, Russia threatens severe 2015 recession. To stop the disaster, the state-owned enterprises to step in now.

Russia’s Prime Minister Dmitry Medvedev fears a severe recession in his country. That said the head of government, according to the news agency RIA. The Russian economy is suffering from international sanctions for Ukraine crisis and the massive drop in oil prices. The currency rubles is thereby come under pressure.

In the fight against price decline, the government is now apparently new agents. Five of the largest state-owned exporters are encouraged to take a part of their foreign exchange reserves to market experienced the Reuters news agency in government circles. “Of course it is the company entitled to retain the hard currencies, too,” said a government official. “But then we also reserve the right not to help them if they have a hard time.”

Gazprom and Rosneft to sell foreign exchange

This affects the energy companies Gazprom, Rosneft and well as the diamond producer Alrosa and crystal. These are up to March 2015 trace their currency holdings to the level of early October, the government said. Until then, every week must report their holdings to the Central Bank

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ruble depreciated after learning of the plans at times at five percent. Recently had to be paid for one dollar 54.44 rubles. In recent days, there were 80 times in the first half, however, only 30 to 35 rubles. “If the exporters are advised not to increase their foreign exchange positions, this might be regarded as the unofficial reintroduction of capital controls,” said Vladimir Osakowsky by Bank of America Merrill Lynch. President Vladimir Putin has repeatedly rejected capital controls.

“They are very meticulous”

The central bank has, according to four banks own overseer in the Departments of Forex trading of the largest Russian banks posted. “We need to talk about all of our activities,” said an executive of one of the five largest banks to Reuters. “They are very meticulous.” A government official defended the procedure: “There was panic Something had to be done and we have taken some steps..”

The ruble crash was triggered by Western sanctions, but even more so by the drop in prices of crude oil – Russia’s largest export. This fueled the fears of a government default and unsettled markets. Prime Minister Dmitry Medvedev said he, after a report by the news agency RIA, he feared a severe recession in his country. The Russian economy suffers not only from the weak ruble and the fall in oil prices, but also among the Western sanctions because of the action in the Ukraine crisis. According to the central bank forecast

The Ukraine’s gross domestic product in 2015 could shrink by around 4.5 per cent. Is hardly better. The Treasury feared the coming year a decline in economic output of 4.3 percent. “We have a difficult year before,” said Finance Minister Natalia Jaresko.