Russia 111005 Basic Political Developments

National Economic Trends

Ruble Snaps Five-Day Losing Streak Against Dollar on Oil Rally

http://www.bloomberg.com/news/2011-10-05/ruble-snaps-five-day-losing-streak-against-dollar-on-oil-rally.html
Q

By Jack Jordan - Oct 5, 2011 8:30 AM GMT+0200

The ruble appreciated against the dollar for the first day in six as a surprise drop in U.S. crude supplies revived demand for Russia’s chief export earner.

Russia’s currency strengthened 0.4 percent to 32.595 per dollar as of 10:05 a.m. in Moscow, its first gain since Sept. 27. It was 0.2 percent stronger at 43.38 per euro, leaving it up 0.3 percent at 37.45 against the central bank’s target dollar- euro basket.

Oil futures climbed for the first day in four in New York, gaining 3.1 percent to $77.99 per barrel, after an American Petroleum Institute report yesterday showed U.S. inventories of the commodity dropped 3.1 million barrels last week, leading investors to reduce bets that prices will decline. Urals crude, the main Russian blend, jumped 1.1 percent to $100.34 a barrel by yesterday’s close.

Investors pared bets the ruble will depreciate further, with non-deliverable forwards showing the currency at 33.2422 per dollar in three months, compared with 33.2968 yesterday. NDFs provide a guide to expectations of currency movements and interest-rate differentials.

Russia’s dollar Eurobond due 2018 fell, pushing the yield up eight basis points to 5.053 percent. The yield on Russia’s sovereign dollar bonds due in 2020 declined one basis point to 5.465 percent.

To contact the reporter on this story: Jack Jordan in Moscow at [e-mail]

To contact the editor responsible for this story: Gavin Serkin at [e-mail]

October 05, 2011 11:56

CBR still not changing 2011 forecast for capital outflow from Russia - $36 bln

http://www.interfax.com/newsinf.asp?id=277944
MOSCOW. Oct 5 (Interfax) - The Central Bank of Russia has still not adjusted its 2011 forecast for net capital outflow from Russia, which comes to $36 billion, CBR Chairman Sergei Ignatyev told journalists on Wednesday.

"So far, we aren't changing anything," he said, when asked if the CBR has revised the 2011 forecast for capital outflow form Russia.

The CBR said on Tues that net outflow of capital from Russia in January-September 2011 totaled $49.3 billion. According to the draft of the main principles of monetary policy in 2012-2014, net outflow of capital from Russia is forecast at $36 billion in 2011.

Ih

(Our editorial staff can be reached at [e-mail])

October 05, 2011 09:26

Russia's net capital outflow stands at $18.7 bln in Q3; $49.3 bln in first 9 months - CB (Part 2)

http://www.interfax.com/newsinf.asp?id=277887
MOSCOW. Oct 5 (Interfax) - Net private capital outflow from Russia in the third quarter, according to the balance of payments, stood at $18.7 billion, the Bank of Russia said on its website.

Capital outflow totaled $21.4 billion in the first quarter and $9.2 billion in the second quarter. Thus, net outflow of private capital from Russia in January-September stood at $49.3 billion.

Net capital outflow totaled $4.6 billion by the banking sector in the third quarter of 2011 and $14.1 billion for other sectors.

The Central Bank estimates that net capital outflow totaled $34 billion in 2010.

Net private capital outflows from Russia are expected to increase to $36 billion in 2011.

kk vp pr

(Our editorial staff can be reached at [e-mail])

07:58 05/10/2011ALL NEWS

Russia’s public debt up by over 70% in 30 months – Audit Chamber

http://www.itar-tass.com/en/c154/239906.html

MOSCOW, October 5 (Itar-Tass) —— Russia’s public debt has gone up by more than 70 percent in the past 30 months and now is 4.6 trillion roubles, the press service of the Russian Audit Chamber reported.

Since the beginning of 2009, the public debt increased by 71.6 percent and was 4.6 trillion roubles as of July 1, 2011. The draft budget for 2012-2014 provide for a further two-fold growth, the press service noted.

As of July 1, 2011, the internal debt was 3.5 trillion roubles, or 2.4 times more than in 2009. The internal debt is made up primarily of securities, the volume of which augmented 2.2-fold in the said period.

The foreign debt as of July 2011 was one trillion roubles, with its total share shrinking from 29 percent in 2009 to 15 percent of the overall public debt in 2011. Like the internal debt, the foreign debt is also made up primarily of securities.

According to the Audit Chamber, the share of securities in the overall foreign debt went up in 2009-2010 from 72.8 percent to 80.7 percent.

Audit Chamber concerned about rising state debt

http://top.rbc.ru/english/index.shtml?/news/english/2011/10/04/04190711_bod.shtml

The escalation of government borrowings entails a risk to Russia’s debt sustainability, the Audit Chamber concluded as a result of its debt sustainability analysis for 2009-2010.

Parliament’s watchdog noted that the Russian government’s total debt has soared 71.6% to RUB 4.6 trillion (approx. USD 141bn) over the last two and a half years. Moreover, the draft federal budget for 2012-2014 calls for doubling the state debt.

Domestic debt has risen 2.4-fold since the beginning of 2009 to over RUB 3.5 trillion (approx. USD 107bn) as of July 1, 2011, while foreign debt has reached RUB 1 trillion (approx. USD 31bn). The percentage of foreign debt has dropped by 15 percentage points to 29.3% of the total debt over the past two years.

At present, the ratio of state debt to GDP and the cost of servicing are far from the caps mandated in the federal budget. However, the state debt ratio to federal budget revenue is nearing the ceiling.

Auditors noted that this trend points to a high risk that budget revenue will not be sufficient to cover federal borrowings planned in the future.