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over losses allegedly inflicted on its Ukrainian subsidiary Prominvestbank. VEB believes that Ukraine has allegedly violated a 1998 inter-governmental agreement with Russia over the promotion and providing mutual protection for investment. After a number of unsuccessful attempts to sell Prominvestbank, mainly due to refusal of the National Bank of Ukraine (NBU) to authorise a deal, VEB decided in 2018 to close the bank down. According to last years estimates made by Russian experts, VEB's losses from the closure of Prominvestbank may amount to about $190mn.
The London Court of International Arbitrage (LCIA) supported the right of FinVision of Artyom Avetisyan to demand the exercise of an option for 9.99% in Oriental Express Bank (OEB) of Baring Vostok Capital Partners (BVCP) investment fund, Vedomosti daily reported on June 17 citing an unpublished copy of the court's decision. The decision could be a major defeat to BCVP. Russia’s most famous fund manager Michael Calvey and several of his colleagues from BVCP were arrested in February after the Federal Security Service (FSB) opened an investigation into an accusation that BVCP illegally mispriced shares in the OEB. Calvey is accused of RUB2.5bn ($37.5mn) embezzlement.
8.2 Central Bank policy rate
As expected the Central Bank of Russia (CBR) cut its key rate by 25 bp to 7.5% per annum -- the first cut since March 2018, the regulator said in a press release following the board of directors meeting on June 14.
"On 14 June 2019, the Bank of Russia Board of Directors decided to cut the key rate by 25 bp to 7.5% per annum. Annual inflation slowdown is continuing. In May, households’ inflation expectations and business price expectations did not materially change and remain elevated. Economic growth in the first half of 2019 is lower than the Bank of Russia’s expectations. Short-term proinflationary risks have abated compared to March," the regulator said.
The ruble slightly strengthens against the dollar and the euro on the Moscow Stock Exchange after Bank of Russia's decision to lower key rate by 25 pp per annum, for the first time since March 2018, according to the Moscow Exchange data.
68 RUSSIA Country Report July 2019 www.intellinews.com