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The Regions This Week
April 7, 2017 www.intellinews.com I Page 6
Eastern Europe
The European Parliament approved granting
a EU visa-free regime to Ukrainian citizens. "I congratulate all who have done their best to this purpose! And I congratulate you, the Ukrainian people, I congratulate you, Ukraine," Ukrainian President Petro Poroshenko said.
Russian Prime Minister Dmitry Medvedev dismissed corruption claims as “politically motivated” a month after corruption allegations against him sparked nation-wide protests on March 26. Anti-corruption blogger and opposition leader Alexei Navalny accused the PM of accepting millions in bribes.
The head of Russia’s Republic of Udmurtia, Alexander Solovyov, was detained by law enforcement officers on suspicion of taking RUB140mn ($2.5m) in bribes and sacked shortly after by President Vladimir Putin. Solovyov,
a senator of Russia’s Federation Council, is
the highest-ranking official to be arrested on anti-corruption charges since the arrest of the former minister of economic development Alexey Ulyukaev last November.
The death toll from the April 3 bombing of the St Petersburg metro system rose to 14 people killed and more than 60 injured. There was no immediate claim of responsibility for the attack, which occurred while President Vladimir Putin was visiting Russia’s second biggest city and his hometown.
The Consumer Price Index in Russia rose 4.3% y/y in March, down from 4.6% y/y growth seen in February and 5.0% in January. The strong disinflationary trend continues in Russia after the central bank curbed the annual price growth below 5% for the first time in post-Soviet history. The ahead-of-the-curve disinflation trend led the Central Bank of Russia (CBR) to cut the key interest rate to 9.75% at its latest policy meeting of March 24 after holding the rate at 10% since August.
The risk rating agency IHS Markit upgraded Russia’s sovereign risk to investment grade on the back of the growing economic recovery and strong manufacturing and service sector growth.
Russian manufacturing continued its strongest expansion since 2011 in March with the Markit PMI score of 52.4, almost the same as the previous month’s 52.5, while positive sentiment amongst Russian manufacturers reached a 22-month high.
Russia’s GDP in the fourth quarter of 2016 increased by 0.3% y/y, ending seven consecutive quarters of GDP decline. The data corresponds to the earlier announced revised GDP decrease of 0.2% in 2016 versus the 2.8% decline seen in 2015.
Ukraine’s international reserves reached $16.7bn in April after a new $1bn tranche from the IMF released under its $17.5bn support programme, and a second €600mn
tranche of macro-financial assistance from the EU.
Russian state oil major Rosneft said it will
pay only 35% of net IFRS profit in dividends for 2016, as it did the previous year, in direct defiance of government orders for a 50% payout by state companies, Vedomosti daily reported, citing the company’s head Igor Sechin.
Money transfers from Russia to Ukraine via foreign payment systems have been banned
by a law signed by Russia’s President Vladimir Putin. The decision last month of Russia’s largest state-owned bank Sberbank to accept documents of the separatist territories of East Ukraine has expanded the Russia-Ukraine rift further into the financial sphere.
The Russian ruble became the best-performing emerging currency as of end-March, overtaking the South Arican rand in delivering the highest carry trade yield of almost 11%, Bloomberg reported. So far in 2017, the Russian currency gained about 8% against the US dollar and about 20% in y/y terms.