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bne February 2018 Companies & Markets I 23
During the appropriation Yevtushenko spent three months under house arrest in 2014 on charges of criminally appropriat- ing Bashneft’s dividends. Rosneft paid some $5bn for the asset, but Sistema claimed the goal of Rosneft’s lawsuits were to get Bashneft “for free.” As it is the settlement payment is a third of what Rosneft paid for Bashneft.
The bribery case related to Rosneft's acquisition of Bashneft also landed Russia's former Economy Minister Alexei Ulyukayev in jail for eight years last week. The case is largely believed to be orchestrated by influential head of Rosneft
bne:FX
Lira plunges as Turkey’s central bank opts only for small rate hike despite overheating economy
bne IntelliNews
Turkey’s central bank announced it was only raising the highest of its four interest rates by 50 basis points on December 14, despite the country’s overheating economy, causing the Turkish lira (TRY) to give up much of the ground it has recovered lately.
The national lender lifted its late liquidity window rate to 12.75% from 12.25% despite being under enormous pressure to raise by at least 100 basis points, given the pressure on the TRY and double-digit inflation running at a 14-year high.
The lira fell to 3.8913 to the dollar after the rates announce- ment, from 3.8275. It stood at 3.8824 in late afternoon Istan- bul time. The Turkish lira’s all-time low came on November 22 when the currency sank to 3.9826.
Economists believe the central bank is under massive politi- cal pressure from Turkish President Recep Tayyip Erdogan, who continues to advance his unorthodox theory that the
and long-time ally of president Vladimir Putin Igor Sechin.
The Kremlin was spinning the settlement as a positive. RDIF said: “This compromise achieved meets both sides’ interests, sends a positive signal to the market and improves the investment climate in Russia.”
But the case highlights once again the power of Sechin and his status as operating above the law. Rosneft has been building an empire and Putin’s intervention into the Rosneft-Sistema dispute is a rare example of Putin clipping Sechin’s wings.
economy needs lower rather than higher borrowing costs.
“I think this relatively small hike – at least compared with market expectations – has raised fears that political pressure may be bearing on the central bank’s decision making,” said Capital Economics senior emerging markets economist William Jackson.
Timothy Ash at BlueBay Asset Management was somewhat less guarded, responding to the rise by saying: “Is that a
joke? The Turks have underwhelmed again. 50bps in tighten- ing? The market was assuming a minimum of 100bps, and that was not what they should do (400bps) but what they assumed the dovish [central bank] would do.”
He added: “The Turkish markets have been behaving reason- ably well in recent weeks, despite a really tricky political/ geopolitical newsflow, because I think the market assumed the central bank would do the decent thing and hike, meaning- fully. This muted hike leaves Turkish markets exposed again.
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