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14 I Companies & Markets bne May 2023
Naftogaz energy investments, which were among the main targets of the Russian Federation in Crimea in 2014.
In February 2019, the tribunal ruled in favour of Naftogaz, confirming its jurisdiction over the case and recognising
that the Russian Federation had illegally expropriated Naftogaz investments in violation of its obligations under the investment treaty.
The second stage of the arbitration proceedings, which has just concluded, was initiated to determine compensation
for Naftogaz losses. In July 2022, The Hague Court of Appeal confirmed the jurisdiction of the tribunal in this case as well. The arbitration award was made after hearings to determine the amount of compensation, which ended in March 2022 amid Russia's full-scale invasion of Ukraine.
UPDATE: Since Naftogaz announced the result of the court's decision, the company has updated its claim and is now demanding $10bn in compensation, Tass reported later the same day on the basis of "lost opportunity to use assets
in Crimea."
The Kremlin has yet to react to the decision, which "must
be analyzed before a course of action is determined," presidential spokesman Dmitry Peskov told Tass the same day.
"Indeed, this litigation took place. It is not new. The decision, however, is new and it needs to be analyzed. Our specialists who are engaged in protecting our rights in this case will analyze it and decide on a course of action," Peskov said, commenting on the court’s ruling.
Turks unable to use automats after officials shrink size of one lira coin
Akin Nazli in Belgrade
Turkey’s state mint has reduced the weight of the one
Turkish lira coin to 6.6 grams from 8.2 grams.
Abdullah Yasir Sahin, general manager of the mint, announced the move on April 15. The mint has also played with the composition of the metals (copper, zinc and nickel) in the coins to overcome losses, he added.
In 2022, the mint produced 1.25mn of the coins and took a Turkish lira (TRY) 600mn loss on production, according to Sahin.
Xinhua news agency reported that the cost of producing the one lira coin stood at more than three lira prior to the changes.
Turks, meanwhile, are complaining that automats do not accept the new coins.
In 2021, the nominal values of Turkish lira coins fell below the coins' scrap values.
Sahin denied that scrap dealers were melting down the coins given smelting costs in relation to the spread between the coins' nominal and scrap values.
The digital USD/TRY lately set off on another record-breaking spree. The latest record, set on April 6, is TRY 19.45. From early March, the pair shot through barriers in the 18.80s that for a short while proved an obstacle. The pair is now mainly trading in the 19.30s, with some spikes.
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At end-2020, the pair stood at 7.4.
Amid the booming lira supply and hard currency outflows via record trade deficits, officials only keep the lira from entering into a nosedive by coercing bankers into blocking and gumming up domestic FX demand. Also supportive are unidentified inflows and support from “friendly countries”.
Another lira calamity would come as no surprise. It could happen at any time.
The turbulence-free mood on the global markets, meanwhile, remains intact. Turkey’s five-year credit default swaps (CDS) remain below the 600-level, while the yield on the Turkish government’s 10-year eurobonds remains around the 9%-level.
Turks, are complaining that automats do not accept the new coins.