blockquote“Cutting rates by 50 basis points here and there is not going really diminish the appeal of the ruble,” said Manik Narain, an emerging markets strategist at Standard Chartered Bank Plc in London. “In terms of nominal interest rates Russia (at 9% as of 24 November) is still offering the highest yields in the emerging market space and in an environment where oil prices are remaining relatively well supported we think that the ruble will continue to be seen as an attractive way to position for global recovery,” /blockquotebr /The world's central banks are having a hard time of it these days, having just gotten through the worst banking and financial crisis in living memory they now face a growing dilema between continuing to give support to the developed economies (which are yet to recover from those early hammer blows) and the danger of creating fresh global asset price bubbles ...

Inflation rates are falling, and prices haven't gone up since July.  This is largely due to crisis-related changes in consumer habits, says the Economic Development Ministry, and analysts support this conclusion, documented in more detail and with case studies here.  But is it business as usual for Russia's super-rich?  Armani plans to open three new stores and over two hundred points of sale in three major cities.  Government plans to triple excise duty on beer could lead to 100,000 job losses in Russia's brewing industry.  Avtovaz's financial problems are bad news for Tolyatti, a mono-city, so-called because 'a single industry accounts for most of the local economy'.  The central bank says the number of troubled banks in Russia has fallen from over 50 to less than 30 in the past months.  Mikhail Gutseriyev, the former head of Russneft ...

Russian and Chinese companies have signed infrastructure and construction agreements today worth $3.5 billion.  Avtovaz has posted record losses of $659 million for the January-June period, a sour accompaniment to the government's decision to extend the unpopular increased import duties on cars by nine months.  September's sales of 28,109 cars were the lowest seen in the history of the factory, which opened in 1974.  Putin has vouched that the $6.8 billion allocated spending on the APEC summit, to be used improving infrastructure in host city Vladivostok, will not be reduced.  The summit to be held in 2012 will apparently help the area attract $100 billion in investment by 2015.  The head of the State Statistics Service, Vladimir Sokolin, has said in an interview that the Economic Development Ministry plays free and easy with statistics.  Russia's budget deficit this ...

Turkey has apparently approved 'in principle' plans for the South Stream pipeline to pass through its waters.  Russia may decrease the price at which it will offer to sell power from a proposed nuclear plant to be built in Turkey.  The Economic Development Ministry has sent a proposal to the government to lower export duties on light oil products from 2012.  Ukraine has reportedly paid Gazprom for its $605 million gas supplies in July.  Ukrainian Prime Minister Yulia Tymoshenko promises, 'we will continue to pay for gas on time'.  Gazprom's official in charge of talks for the proposed South Stream gas pipeline to Europe has resigned.  Russia and Venezuela have discussed prospects for building nuclear research reactors and distillation reactors.  Gulf Keystone Petroleum Ltd has made a 'significant oil discovery' in the Kurdish region ...

President Medvedev has openly complained about the amount of red tape small businesses have to plough their way through to develop.  Medvedev has suggested that small and medium-sized businesses are key factors in economic modernization.  The President has instructed the Federal Anti-Monopoly Service and the Economic Development Ministry to increase their controls over the system for placing state purchases.  The Federal Anti-Monopoly Service may also fine fertilizer manufacturer FosAgro up to $16,000 for not submitting information on its production costs.  Billionaire Oleg Deripaska's Basic Element has agreed to build a temporary parking lot in Moskva-City on a site formerly designated for the Russia Tower.  UralChem and Acron have announced they stopped production after potash miners cut off their supplies.  Investment bank UralSib's profits dropped 38.1% in 2008.  RusAl has begun talks on fourth-quarter sales of aluminum ...

IKEA may resume expansion in Russia after the Economic Development Ministry pledged to help resolve several important issues, including the completion of its Mega complex in the Samara region.  Getting a pen thrown at him and public castigation aside, Yulia Latynina suggests that the contract Oleg Deripaska signed in Pikalyovo 'ended up being heavily in his favor', as VTB were the ones financing the reopening of the oligarch's troubled factories.  Profits at Russian banks could suffer in 2009 if bad loans rise to 10% of credit portfolios.  Sberbank has suggested that a July 15 deadline to seal a deal for Opel is not firm.  The OECD has said that the stability of the Russian banking system is of 'prime importance'.  The European Bank for Reconstruction and Development said its board approved a $500 million,10-year loan ...

Reuters reports that US businessmen will press Barack Obama to urge for less corruption and greater openness towards foreign companies during his visit to Moscow.  French Finance Minister Christine Lagarde and Bank of France Governor Christian Noyer have joined in the debate stoked by China and Russia about global coordination of currencies.  Troika Dialog has suggested that the Economic Development Ministry's forecast of an 8.5% contraction of GDP this year may be 'too cautious'.  The corporate sector's foreign debt has grown to $436.8 billion as of July 1, from $420.7 billion as of April 1, suggesting that borrowing has begun again.  It appears that a Russian sovereign wealth fund may be interested in buying a stake in car maker Porsche.  Despite reports of stalling, Magna's deal with Opel is apparently nearing completion.  US farm machinery maker ...

The Economic Development Ministry has changed its forecast for the growth of GDP, predicting that the economy will shrink 8.5% this year instead of the 6-8% previously forecast.  The Ministry is more optimistic on inflation, predicting a rate of 12-12.5% instead of 13%.  Putin has ordered state banks to offer major corporations $13 billion in loans as Russia's economy shrinks for the first time since 1998.  Putin has apparently said that Russia should be aiming for a deficit of 2-3% of GDP as opposed to the 7.4% planned.  As Russia's second largest lender VTB struggles with bad loans, which have increased three-fold this year, the company may make 1,000 employees redundant.  The lender will make a loss this year.  Its chief financial officer has said the bank may require a second share issue ...

In a meeting with Russian businessmen, Dmitry Medvedev has lambasted ministers who make gloomy economic forecasts. 'When my colleagues from the government say that Russia will not come out of the crisis for another 50 years, it is unacceptable. If you think so - go and work somewhere else'.  Nonetheless, Deputy Economic Development Minister Andrei Klepach has said that Russia's economy could shrink as much as 8% this year after dropping 9.8% in the first four months of 2009.   Reuters reports that Russia's recession this year may be 50% deeper than during the 1998 crisis.  Picketing outside the Economic Development Ministry on national Entrepreneur Day, small business owners complained they are not supported enough by government measures.  The Moscow Times reports on Nizhny Novgorod, the car and bus manufacturing hub, beaten by the crisis but trying ...

The Economic Development Ministry has announced that unemployment reached 10% last month, and will continue to rise, but at a slower pace.  The government is sticking to its plans to reduce inflation to 8% by 2012, and plans to reduce tax pressure on businesses as of 2011.  In the face of a budget deficit, the state may consider borrowing funds from the World Bank to finance projects.  Russia has also asked the World Bank to offer a partial guarantee on VEB's bond issue.  In the wake of a budget deficit, Russia will borrow $16.9 billion on the local debt market over the coming year.  Core shareholders in construction company Strabag are set to agree on taking Oleg Deripaska's 25% stake.  Aras Agalarov's Crocus Group plans to construct a university in Vladivostok for the 2012 APEC ...