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. Last Updated: 07/27/2016

Business in Brief

Fitch Boosts Moscow

MOSCOW (Reuters) Ч Fitch, the international rating agency, said Thursday it has placed its long-term rating of Moscow, currently set at "B minus," on positive-rating watch following a redemption of Eurobonds by the city.

Fitch also has changed the outlook on St. PetersburgТs long-term foreign and local currency ratings of "CCC plus" to positive from stable after the cityТs economy performed well in 2000 and the first five months of 2001.

Reserves Up $300M

MOSCOW (Reuters) Ч Foreign currency and gold reserves rose $300 million to a new all-time high of $35.6 billion in the week ending July 13, the Central Bank said Thursday.

Reserves have risen $7.6 billion from $28 billion at the start of the year.

One Million Sbercards

MOSCOW (MT) Ч State savings bank Sberbank has issued 1 million cards for the Sbercard payment system, Interfax reported the bank as saying Thursday.

The automated Sbercard system has been in operation since Jan. 1, 1997.

Sberbank smart cards account for around 12 percent of the cards issued in Russia, and the number is constantly increasing, the bank said. Sbercard turnover totaled 90 billion rubles in 2000, with more than 18 million transactions.

Turnover more than doubled from the previous year.

IMF Sees 4% Growth

MOSCOW (MT) Ч Russia will see 4 percent economic growth and 17.6 percent inflation this year, Prime-Tass reported the International Monetary Fund as saying in a report published Wednesday.

IMF experts have been studying the countryТs economic performance since last December, when Russia stopped taking loans from the IMF, and have approved the government action.

Russian authorities, however, have failed to build on last yearТs economic achievements to promote structural reform, the report said.

The countryТs main short-term objective is to make good use of the current strong payment balance so that it cannot impede economic growth or whip up inflation, the experts said.

The fund called on Russia to be committed to ambitious structural reform, which, among other things, could help restore ties with the IMF in 2002, when Russia is likely to need new loans.

ARKO to Put in $30M

MOSCOW (Vedomosti) Ч The Agency for Restructuring Credit Organizations, or ARKO, decided Wednesday to spend 1 billion rubles ($30 million) on the bailing out of SBS-Agro, almost all of which will be used to pay private depositors.

ARKOТs board decided to use the bankТs own funds for the project. During the first half of 2001, ARKO earned 660 million rubles after selling shares in five restructured banks. Also, the government granted ARKO 375 million rubles from the capital of Rosselkhozbank.

ARKO hopes to repay SBS-Agro depositors before October. However, the Constitutional Court this fall is expected to consider complaints made by SBS-Agro depositors that an amicable agreement between ARKO and SBS-Agro contradicts Russian law Ч and ARKO fears the court will take the side of the depositors.

The agreement with SBS-Agro, confirmed by the court May 8, stipulates that all depositors are paid 20 percent of the claimed sum but no more than 20,000 rubles.

If the Constitutional Court approves the court cases, it will be necessary to initiate bankruptcy proceedings against all of the banks where peaceful agreements are in place, ARKO said.

Itera Expands in Latvia

RIGA, Latvia (Reuters) Ч The Latvian arm of Russian gas firm Itera said it had taken "more than 70 percent" in the 2 percent state stake auction of Latvian Gas, which sold out for $15.8 million.

"According to preliminary data, we have bought more than 70 percent of the stake," said Juris Savickis, head of Itera Latvia.

The Riga Stock Exchange said earlier that 798,000 state-held shares were sold at 12.51 lats ($19.80) per share, a 249.4 percent premium over the initial price of 3.58 lats set by the privatization agency.

The bourse said it received 23 orders for a total bid of 3.2 million shares. It said the maximum price was 15.01 lats.

Following the auction, the state holds around 6 percent of Latvian Gas, which the privatization agency is considering selling in a single auction in August.

The final decision by its council has not been taken yet. "I would not like to comment at the moment whether we are going to bid for the remaining 6 percent. We have to first count how much we have spent and who has taken the rest in todayТs auction," Savickis said.

Prior to ThursdayТs auction, the natural-gas utility was 43.33 percent owned by German Ruhrgas and E.ON Energie. Russian Gazprom held 25 percent in the company and Itera Latvia 17.7 percent.

Neither Ruhrgas nor E.ON Energie representatives were available for comment.