Page 13 - RusRPTMay20

2.5 ​ ​CBR sells Sberbank to NWF for $28.5bn
In a deal agreed in February, on April 10 the Central Bank of Russia (CBR) sold its majority stake in Sberbank to the state.
The transaction was originally supposed to take place over a longer period of time, not all at once. The price of the share pot - 50% of the shares plus one share - was initially estimated at about RUB2,500bn, but due to the general decline in stock prices, the price eventually became RUB2,139bn rubles, or about $28.5bn.
Sberbank is the largest bank in Russia and alone accounts for about a third of the Russian banking sector.
As a result of the transaction, the central bank removed a conflict of interest when it no longer owns the bank it controls. More importantly, however, the deal will increase the central bank’s distributable funds.
When the central bank recognizes its profits to the state, these funds can be used for public expenditure, notwithstanding the current budgetary rule.
Sberbank's share capital was bought by the National Welfare Fund, whose assets invested in highly liquid securities decreased at the same time. The transaction amount is about 2% of the 2019 GDP.
2.6 ​ ​CBR cuts rates 50bp to support growth, ignores inflation
The Central Bank of Russia (CBR) has followed its Emerging Markets peers' suit and delivered on its guidance to start cutting the key interest rate to support the economy ​in the unprecedented coronavirus (COVID-19) crisis.
The board of the regulator resolved at the policy meeting of April 24 to cut the interest rate by a double step of 50bp to 5.5%, announcing a "shift to the soft monetary and credit policy cycle," allowing for further cuts at the next meetings (the next one is scheduled for June).
As reported by ​bne IntelliNews​, the CBR's governor, Elvira Nabiullina, has shown she was ready for action to kick-start a monetary easing cycle​, after which the ​analysts saw the rate cut as inevitable​, consensus expectations foreseeing a front-loaded 50bp cut in April.
Inflation in check, despite weak oil and ruble​ The inflation-minded CBR commented that the anti-COVID-19 measures will have a "significant and prolonged" disinflationary effect.
At the same time, for three days leading up to the CBR's policy meeting the regulator has been selling record-high volumes of foreign currency in daily interventions to support the ruble (over $300mn on April 23, $220mn on April 22 and $200mn on April 21).
But the CBR still believes that the plunge in demand will overwhelm even the risks coming from the ​recent plunge in oil prices​. The CBR now sees inflation in the range of 3.8-4.8% by the end of the year.
Russian consumer prices rose 0.2% over the week ending on April 20, flat compared to the previous week. "Based on the latest data, monthly inflation seems set to reach 0.9-1% in April (versus 0.3% month on month in April
13​ RUSSIA Country Report​ May 2020 ​ ​www.intellinews.com