SOVEREIGN ECONOMY: TOP EVENTS OF THE WEEK
The Russian ruble’s value continued to decline on Wednesday, breaking the psychological barrier of 110 rubles/euro and 100 rubles/US dollar. Fundamental factors continued to work against the Russian currency. The market is still waiting to feel the influx of additional currency proceeds from the rise in oil prices. The emergency measures taken by the authorities only led to a slight rollback of the exchange rate.
The Bank of Russia's Board of Directors raised the key rate by 350 basis points (bps) - to 12.00% per annum from August 15. Evidently, this decision was driven by the rapid depreciation of the ruble against major reserve currencies and aimed at mitigating the risks of inflationary pressures.
The major exporters together with government and the Central Bank met up on August 14, with the aim of stabilizing the ruble exchange rate. Government representatives requested companies to increase the sale of currency on the market. The possibility of prohibiting and monitoring transactions classified as capital outflows was discussed too. If these measures do not produce the desired effect, the authorities are ready to reintroduce the compulsory mechanism of selling foreign currency proceeds on the domestic market (from 70% to 90%).
The USA has imposed sanctions on the founders of the "Alfa Group": Mikhail Fridman, Petr Aven, German Khan, and Alexey Kuzmichev. All of the businessmen who fell under American sanctions control today, are one of the largest Russian insurers - the company "AlfaStrakhovanie", which has insured vehicles of 65 military units and other organizations associated with the Russian National Guard and the Ministry of Defense.
Contrary to Gazprom's warnings, the storage facilities of the European Union have been filled with gas ahead of schedule, reaching almost 90% capacity. According to the official representative of the European Commission, Stefan de Kersmaker, the storage level has already reached 89.89%. Throughout the spring and summer of this year, Gazprom has consistently stated that it will be very difficult to achieve this due to "politically motivated decisions aimed at abandoning the import of Russian pipeline gas."