Russia 090804 Basic Political Developments

Russians become less tolerant of people with origins in Caucasus, Central Asia – poll

http://www.interfax.com/3/509069/news.aspx
MSCOW. Aug 4 (Interfax) - Russians' ethnic tolerance has generally

increased over the past few years, and the list of the people they

dislike the most is topped by people with origins in the Caucasus,

Central Asia, and Gypsies, indicates a poll conducted by the All-Russian

Center for Public Opinion Research (VTsIOM).

The poll was conducted in 42 regions, territories, and republics of

Russia.

Fifty-five percent of the respondents surveyed said they do not

dislike any other ethnicities. The poll shows that Russians' ethnic

tolerance has increased by 21% over the past four years.

Thirty-one percent of the respondents surveyed said they like

Russians and Slavs in general the most (31%). The other most popular

ethnicities are Belarusians and Ukrainians (13% and 11%, respectively).

Seven percent of the respondents said they like Europeans (Englishmen,

Frenchmen, Germans, Italians, and Spaniards), four percent said they

like people with origins in the Caucasus (Adygs, Georgians, Kabardins,

etc.), three percent like Tatars, and 2% said they like Bashkirs and

people with origins in Mordovia.

The least popular ethnicities are Americans, Buryats, Jews,

Chinese, Moldovans, and Japanese (1% each).

Twenty percent of the respondents said their attitude to all

peoples is the same.

The poll shows that the number of Russians who like Russians and

Slavs in general has been declining since 2005 (it is now 31% against

36% in 2005) and the percentage of those who like all ethnicities has

increased considerably (from 8% to 20%).

The anti-rating of ethnicities is topped by people with origins in

the Caucasus (Azerbaijanis, Georgians, Armenians, Dagestanis, Chechens,

etc.), with 29% of the respondents expressing irritation about them. The

second least popular group includes people from Central Asia (Tajiks,

Uzbeks, and Kazakhs), with 6% of the respondents expressing dislike of

them. They are followed by Gypsies (4%, Americans, Chinese, Ukrainians,

and Baltic nations (3% each), Europeans (Englishmen, Germans), and Jews

(2% each).

Some of the respondents said they are negative about Moldovans,

Tatars, Turks, Asians, Arabs and Muslims, and people from Africa (1%

each).

The poll shows that the percentage of those Russians who disliked

people form the Caucasus has increased to 29% from 23% in 2005. The

percentage of those who dislike people from Central Asia has increased

to 6% from 2% in 2006.

National Economic Trends

http://www.iii.co.uk/news/?type=afxnews&articleid=7457264&subject=markets&action=article
MOSCOW - Russian Finance Ministry to place 100 billion roubles of temporarily free budget funds in three-month deposits at commercial banks at a minimum bid rate of 12.0 percent.
Russia c.bank injects 22.53 bln roubles via repos


http://www.lse.co.uk/MacroEconomicNews.asp?ArticleCode=jqlftsram8z98tg&ArticleHeadline=russia_cbank_injects_2253_bln_roubles_via_repos
4-AUG-2009 09:17
MOSCOW, Aug 4 (Reuters) - The Russian central bank injected 22.53 billion roubles ($721.2 million) of one-day funds into the banking system at a rate of 8.26 percent in its first auction of the day on Tuesday. The minimum interest rate was set at 8.0 percent, and a maximum of 25 billion roubles had been on offer for the two repo auctions scheduled for the day.
Following are results of the latest auction, provided by the central bank on its Web site (www.cbr.ru):

Date Aug 4 Aug 3 Aug 3

Session 1st 2nd 1st
Amount (bln rbls) 22.53 5.61 13.52
Bids (bln rbls) 22.53 9.34 22.40
Average rate 8.26 9.01 8.44
NOTE - For details of central bank repo tenders click here .
($1=31.24 Rouble) Keywords: RUSSIA REPOS/FIRST
(Moscow Newsroom; [phone]; [e-mail])

Russia daily c.bank swap limit at 5 bln rbls

http://www.lse.co.uk/macroeconomicNews.asp?ArticleCode=l25jisvmcnorzsh&ArticleHeadline=Russia_daily_cbank_swap_limit_at_5_bln_rbls
4-AUG-2009 07:33

MOSCOW, Aug 4 (Reuters) - Russia set the daily limit for currency swap operations with the central bank at 5 billion roubles ($160 million) on Tuesday, the same as in the previous trading session.

Limits on how much foreign currency banks can swap for roubles in the central bank were introduced from Oct. 20 in a bid to hinder currency speculators. Operations which do not involve the central bank are unaffected. ($1=31.24 Rouble) Keywords: RUSSIA SWAP/

(Moscow Newsroom, [phone], [e-mail])

Large deficits to generate heavy borrowing

http://www.businessneweurope.eu/dispatch_text9392

Citibank, Russia

August 4, 2009

Increased public borrowing could bring the debt to GDP to 16.4% in 2012, according to the Ministry of Finance. On 30 July the Russian government adopted the basic parameters of fiscal policy for 2010-12 (see Russia Macro Weekly, 30 July 2009). The government's budget plan is for a deficit of 7.5% of GDP in 2010 (about US$100bn) and 3% in 2012. Part of the public spending in excess of budget receipts will be covered by Russia's wealth funds. However with the Reserve Fund likely to be completely exhausted in 2010 the Russian Ministry of Finance envisages borrowing of over US$43bn in 2010 on the domestic and international capital markets including US17.8bn in Eurobonds and US2-4bn in loans from the World Bank and commercial creditors. Overall, the Ministry envisages borrowing of more than US$20bn a year in the international financial markets in 2010-12 and for ruble debt to increase by 50% during this period (Figure 2).

We believe fast growth in borrowings could be a challenge for the Russian government. On the domestic market the Ministry of Finance is caught between satisfying the fiscal needs of the federal budget and sustaining a suitable borrowing rate for the corporate sector. In January-July the government placed around 50% of its planned domestic debt during the primary auctions, while trying to avoid pushing interest rates up. Lower refinancing rates could make current yields more attractive, but with the budget's large injections of liquidity towards the end of 2009-beginning of 2010, we believe the CBR has limited room for further rate cuts (even though we would not rule out another 50bp cut). In international debt markets, Russia will probably face increasing interest rates due to the likelihood of monetary tightening after the recession is over and inflation starts to rise. Moreover, Russia will have to compete for scarce financial resources with many other developing countries in need.
Funds Down $5.9Bln in July

http://www.themoscowtimes.com/article/1009/42/380125.htm

The Finance Ministry said Monday that the country’s two sovereign wealth funds fell by a combined $5.9 billion in July after the government continued to tap cash to help plug the first budget gap in a decade.

The Reserve Fund, which will be emptied by the end of next year, declined to 2.8 trillion rubles ($88.5 billion), compared with $94.5 billion the month before. The National Welfare Fund, which the government is using to provide loans to recapitalize banks and bolster the pension system, stood at 2.9 trillion rubles, compared with $89.9 billion the month before. (Bloomberg)

Russian government spent $46bn of its savings in 7M09

http://www.businessneweurope.eu/dispatch_text9392

Alfa, Russia

Tuesday, August 4, 2009

According to recently released information, the Russian government's savings declined by $46bn in January-July 2009. While the National Welfare Fund was up by $2bn and reached $90bn as of the end of July, the Reserve Fund has dropped by $48bn.

The Russian government expects to cut the Reserve Fund to $44bn by the year's end and to have fully expended it by mid-2010. The National Welfare Fund is expected to be fully used by 2013. However, the latter estimate assumes that the government will be able to attract international and local borrowing of $18bn and $24bn, respectively, in 2010. If this borrowing turns out to be unavailable or expensive, the government will be forced to use up the National Welfare Fund more quickly in order to finance spending.

Another important point is that the $46bn decline in total state savings since the beginning of the year has had little effect on the banking sector. June's 4.2% m-o-m increase in corporate accounts and 1.3% m-o-m growth in assets, reflecting the budget deficit, were still coupled with a 1% decline in both retail and corporate lending.

Unemployed Drops by 0.3%

http://www.themoscowtimes.com/article/1009/42/380125.htm

The number of people officially registered as unemployed in the country slid 0.3 percent in the week to July 28, the Health Ministry said in a statement on its web site Monday.

The figure dropped by 5,600 to 2.15 million people, said. (Bloomberg)

Official unemployment falls to 2.14m

http://www.businessneweurope.eu/dispatch_text9392

bne
August 4, 2009

The economic good news continues with the number of people registered as unemployed falling to 2.1m in July, Healthcare and Social Development Minister Tatyana Golikova said, ITAR-TASS reported.

The number of registered jobless people was 2.15m as of July 22, according to previous reports.

Total unemployment currently amounts to 8.5%, Golikova said.

Farming Output May Fall

http://www.themoscowtimes.com/article/1009/42/380125.htm

Agricultural production may shrink 1.7 percent this year, compared with an earlier forecast for a 3.9 percent expansion, Kommersant reported, citing an Agriculture Ministry report.

Crop production may decline 4.5 percent this year, the newspaper said. Russia imported $35.2 billion of food in 2008 and exported $9.4 billion, Kommersant said. (Bloomberg)