SOVEREIGN ECONOMY: TOP EVENTS OF THE WEEK
15/09/2023, 13:30
Considering inflation, the real effective exchange rate (REER) of the ruble against the currencies of major trading partners decreased by 29.9% from January to August 2023. In August, the REER fell by 4.6%, according to data from the Bank of Russia. The real effective exchange rate of the ruble is determined to identify the dynamics of currency exchange rates through the average value of trading partners' currency rates.
Petrol prices in Russia increased by 2.5% in August, while diesel fuel prices rose by 4.1%. From January to August, petrol prices have increased by 7.4% (compared to a general inflation rate of 3.7%). In August 2023, petrol prices increased by 7.7% compared to last year. Diesel fuel prices rose by 4.1% in August, following a 0.8% increase in July.
VTB and Sberbank are seeking solutions to the issue of "stuck" rupees in India. The biggest Russian banks, VTB and Sberbank, allegedly have found a way to convert Indian rupees into rubles to repatriate this currency export revenue to Russia, said VTB Chairman Andrey Kostin. Former Minister of Finance Mikhail Zadornov stated that rupees were one of the less obvious factors contributing to the weakening of the ruble last year. During the first half of the year, Russia supplied $30 billion worth of oil and petroleum products to India, while imports from India to Russia are estimated at approximately $6-7 billion annually.
Russian businesses are concerned about selective property nationalization. The government's policy of nationalizing private assets may lead to unfairness towards their owners and property transfer into the hands of the "right" people, said Alexander Shokhin, the head of the Russian Union of Industrialists and Entrepreneurs (RSPP).
German investors are divesting their stake in Pulkovo Airport. German company Fraport AG owns 25% of the management company of Pulkovo Airport, called "Northern Capital Air Gateway" (NCAG). Despite criticism, Fraport has remained a shareholder of NCAG even after the start of hostilities in Ukraine, although in March 2022, it announced that it was considering various exit options.
