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. Last Updated: 07/27/2016

Business in Brief

Ruble Union in 2005

The Associated Press

The Federation Council on Wednesday ratified an agreement that establishes the ruble as a shared currency of Russia and neighboring Belarus, but delays its introduction until 2005.

The delay reflects the difficulties of implementation and Moscow's apparent concern that impoverished Belarus will drag down its own economy.

The Federation Council voted 117-2 with two abstentions to ratify the agreement, which was signed last year. The State Duma has already ratified it.

The Federation Council's finance committee said that the single currency would require changes in Russia's Constitution and its law on the Central Bank. The proposal says the two countries will establish a single money-printing center.

GKO Rules Changes


The Central Bank plans to widen the range of operations open to foreign investors in restructured GKO treasury bills, a bank official said Wednesday.

Foreign investors in Russia's domestic debt, whose funds were frozen after the 1998 financial crisis, have limited options to repatriate proceeds from restructured ruble debt, currently locked up in so-called "S" accounts.

The official said the bank hopes its decision will satisfy foreigners' repatriation needs, estimated at about $1 billion this year. He said the bank would draw up a resolution aiming to allow them to trade between themselves rubles they had received in proceeds from the restructured GKO bills.

"One nonresident will transfer rubles from an S account to another nonresident's account, but he has to pay for the rubles. Since they are both nonresidents, they will perform the payment outside the Russian Federation," the official said. "Hard currency will change hands abroad, rubles will change hands inside the country."

He said the resolution would allow foreigners willing to buy government securities or shares or to invest in projects in Russia to buy cheaper rubles while permitting others to repatriate revenues. The official said the Central Bank had set the 2001 limit on such investment at 2 billion rubles ($70 million), but it could be raised.

April Caspian Summit?


ASTANA, Kazakhstan — Russia hopes a summit of Caspian states will take place in April to resolve the sea's division, the presidential envoy for the Caspian said Wednesday.

Viktor Kalyuzhny was speaking to journalists after meeting Kazakh Prime Minister Kasymzhomart Tokayev in the capital, Astana. An earlier summit scheduled for March 8-9 was put off at Iran's request.

The Caspian, which contains vast energy reserves, is landlocked and surrounded by Russia, Azerbaijan, Iran, Turkmenistan and Kazakhstan. Failure to resolve the division of the sea has delayed the development of its resources.

Kalyuzhny said that after visiting Kazakhstan he would go to Azerbaijan, Turkmenistan and Iran. "In Iran we must finalize preparations for the summit, which should take place in [the Turkmen capital] Ashgabat in April," he said.

MT Index Falls 3.8%


Top Russian shares sank Wednesday after turbulence in Western markets and a lack of positive news at home, but some dealers saw support at lower levels.

The dollar-denominated Moscow Times Index of 50 leading shares closed down 3.8 percent at 138.69 on volume of $28.2 million. The RTS index fell 1.87 percent to close at 174.03 on volume of $19.8 million, The key RTS index ended the day 4.17 percent lower at 167.46 on volume of $19.55 million.

"The Russian market fell quite strongly on active sales on expectations and a consequent fall in Europe and the United States," said Troika-Dialog trader Alexei Dolgikh.

National power grid Unified Energy Systems fell 4.21 percent to $0.1002, while Mosenergo slid 5.61 percent to $0.0370. Yukos oil finished the day with a 1.7 percent gain to $2.568, while No. 1 oil producer LUKoil lost 6.5 percent to $9.35.

$300M Loan to Belarus


MINSK, Belarus — The World Bank may lend Belarus up to $300 million over three years under a new lending program expected to be approved in June, a senior World Bank official said Wednesday.

"We are discussing the amount of credits, but I think it may be $200 million to $300 million for the next three years," Luca Barbone, the bank's director for Ukraine and Belarus, told a news conference.

Barbone was on a three-day visit to Minsk to discuss a new World Bank strategy for the former Soviet state.

The World Bank and the International Monetary Fund froze their loans to Belarus several years ago in protest against the unwillingness of the authorities to introduce market reforms.

Barbone said the bank's decision to start new loan talks was prompted by crucial changes in the country's foreign exchange market. Belarus unified its different ruble exchange rates and lifted currency market restrictions last year.