Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

BUSINESS WEEK IN REVIEW: october 18 to 24

Emergency Budget Inked

Russia's Cabinet approved Thursday an emergency fourth-quarter budget with a massive 70 billion ruble ($4.1 billion at Tuesday's rate) deficit. Finance Minister Mikhail Zadornov warned that unless Russia got a big loan from the International Monetary Fund the gap would be filled by printing money. Zadornov said in a best case scenario Russia would have to print about 20 billion rubles this year. An IMF delegation arrived in Moscow to look at the government's economic plans.

New tax chief Georgy Boos claimed tax collection for October would be about 11 billion to 13 billion rubles, a big improvement on September and about the same as last July. But in real terms, after allowing for high inflation, tax has fallen sharply in the past three months.

The government struggled with little success to force Gazprom to honor its tax debts. It signed a complicated deal last week under which Gazprom will pay off 31.2 billion rubles in the last quarter but 40 percent will be in the form of food supplied by Ukraine and Belarus.

The government is also preparing to sell 2.5 percent of Gazprom, the world's biggest gas producer, in a bid to raise cash for its severely depleted coffers, Interfax reported Friday.

Meanwhile the government announced plans to sell the Central Bank about $475 million in bonds backed by future gold purchases by the Finance Ministry. Analysts saw the deal as an ingenious way to circumvent the provision in the Central Bank law that specifically bans the nation's main bank from issuing emissionary loans to the government.

Exchange System to be Axed

Central Bank Chairman Viktor Gerashchenko' said he would scrap the dual exchange rate system for the ruble that it introduced Oct. 6. The system gives exporters and importers one rate at a special morning trading session and then allows all other traders a less favorable rate at an afternoon session. Gerashchenko said that the difference between the two rates was "incorrect." The ruble went sideways last week, drifting around 16 to the dollar according to the Central Bank's official rate.

Transneft Delays Dividends

Russian oil pipeline monopoly Transneft decided at an emergency shareholders' meeting Thursday to delay paying 1997 dividends until the end of 1998 pending a decision on whether part of its stock had been sold illegally.

The Russian Prosecutor General is investigating allegations that the former management of Transneft coerced workers into selling their shares f 25 percent of the company f and then transferred the shares offshore.

The emergency meeting also elected a new board of eight members, which then elected Sergei Chizhov, deputy fuel and energy minister, as chairman. The shareholders appointed PricewaterhouseCoopers as Transneft's external auditor.

No Results From Debt Talks

Talks in London on restructuring tens of billions of dollars of frozen Russian state debt failed to produce a result. Russia defaulted on the debt on Aug. 17. Russia is insisting on linking the ruble-denominated GKO and OFZ debt to a deal on currency forward contracts sold by Russian banks.

Meanwhile fears grew that Russia would default on its $150 billion hard currency debt. Russia paid only $115 million of about $800 million in interest payments to the Paris Club of country creditors due in August and September, a senior Finance Ministry official said Tuesday.

Tokobank Wins in Court

The near-defunct Tokobank won a potentially precedent-setting court decision, allowing it to not pay millions of dollars in debts on currency forward contracts.

Tokobank, which was stripped of its license by the Central Bank in September, was taken to court over a $50 million debt by a large group of Russian and foreign banks. The Moscow City Arbitration Court decided that currency forward contracts are just "wagers" and, according to the Russian civil code, courts cannot rule on them unless one of the sides was coerced or deceived into making the bet.

Some talks were held on giving Russia humanitarian food aid for the winter but no deals have been signed.

Russian giant Tyumen Oil Co. announced Tuesday that it has received a large loan from a German bank, despite Russia's economic crisis, which has scared away other foreign lenders. Tyumen Oil has received $105 million at a pre-crisis interest rate from Westdeutsche Landesbank.