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market. The National Bank of Ukraine emphasised the impermissibility of international banks' cooperation with Russia and Belarus and called on them to fulfill their promises and finally withdraw from the aggressor countries’ markets. The appeal primarily concerns Raiffeisen Bank International, Intensa Sanpaolo, OTP Bank, ING Bank, and Credit Agricole, whose subsidiaries in Russia provide services and pay taxes to the aggressor state that is killing Ukrainians. Previously, representatives from these groups assured the NBU that they were studying all options for the future of their business in Russia, including exiting this market. However, after ten months of the war, no progress has been made regarding the final decision to withdraw from the Russian market. According to the National Bank, these banks openly use the names "LPR" and "DNR" as separate entities in their materials, tacitly approving Russia's brazen violation of international law.
Russian sanctioned “military” bank Promsvyazbank (PSB) has acquired the SMP-Bank Group for RUB46bn ($0.62bn at current rates), or almost the full value of its capital, from stoligarchs and close allies of Vladimir Putin Arkady and Boris Rotenberg (50% and 43% stakes respectively), Kommersant daily reported on December 2022. As followed by bne IntelliNews, a number of large banking assets have been reshuffled in 2022 after the banking system came under sanctions for Russia’s full-scale military invasion of Ukraine. This has included an exodus of foreign banking groups, oligarch Vladimir Potanin rebuilding his banking empire and the Central Bank of Russia (CBR) selling off the restructured bailed assets from the previous sector clean-up. However, while most of the deals were rushed and took place with over 50% discounts, sources told Kommersant that the sale of Rotenbergs’ SMP had been in the works for almost a year. The influential infrastructure magnates cashed out of SMP at almost full capital value.
8.2 Central Bank policy rate
The board of the Central Bank of Russia (CBR) has resolved to maintain the key interest rate flat at 7.5% at the policy meeting of October 28, making no key rate cut for the first time in six months, as expected by the market.
The 7.5% rate will remain in place at least until December 16, the date of the last scheduled policy meeting of the year, unless the CBR makes an unscheduled emergency rate move (it did so on three occasions in 2022).
To remind, the CBR had previously lowered the rate six times in a row since mid-March from an initial emergency rate of 20%. The CBR more than doubled the interest rate to 20% on February 28, a few days after Russian forces crossed the border into Ukraine, to contain the inevitable shock to the currency and to contain soaring inflation. The fast action seems to have worked, as inflation had begun to fall from its peak of 17.8% in April to 13.7% in
99 RUSSIA Country Report February 2023 www.intellinews.com