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. Last Updated: 07/27/2016

Business in Brief

Budget Rejig

MOSCOW (Reuters) -- The Finance Ministry will have to dip into additional 2002 budget revenue to cover for increased wages for the military, rejigging the budget in the process, Finance Minister Alexei Kudrin said Thursday.

The government initially expected the increases to come from 2003, but the State Duma has voted for higher wages from July 1. President Vladimir Putin signed the bill into law last week.

"The Finance Ministry is preparing proposals on changes to the budget. The main aim is to find funds to increase wages in the military," Kudrin told reporters.

He said the ministry would have to find 23 billion rubles ($719 million) for the task in 2002.

No Rejig for Estimates

MOSCOW (Prime-Tass) -- The government is not planning to revise its estimates of key macroeconomic parameters for this year, Finance Minister Alexei Kudrin said Thursday.

"The main parameters of Russia's financial system will be stable and predictable this year," Kudrin said.

Kudrin specifically mentioned that annual inflation and the ruble's average exchange rate with the dollar would be in line with the forecast parameters. He did not provide any figures.

The government expects the 2002 annual inflation rate to amount to 12 percent to 14 percent, while the ruble's average annual exchange rate is projected at 31.5 rubles per dollar.

VAT Revenue Up

MOSCOW (Prime-Tass) -- VAT collection totaled 145.8 billion rubles ($4.7 billion) in January to April, up 9.4 percent year on year, Tax Minister Gennady Bukayev said Thursday.

He added that VAT collection was short of the target by 11.6 percent, or 9.8 billion rubles, in that period.

Bukayev said the shortage was due to a decline in VAT charges, which fell to 123 billion rubles in the period compared with 162 billion rubles in January to April 2001.

Chickens Are Coming

MOSCOW (Reuters) -- Fresh cargoes of U.S. poultry will arrive in June, more than a month after the lifting of a ban on their import that strained relations with Washington ahead of the U.S.-Russian summit.

"Currently three ships carrying around 20,000 tons of poultry are on their way to Russia," Albert Davleyev, the head of the U.S. Poultry and Egg Export Council office in Moscow, said Thursday.

Sergei Kuznetsov, an Agriculture Ministry spokesman, said that by May 15 the ministry's veterinary service had issued 20 permits to import U.S.-produced poultry.

Debt Shrinkage

MOSCOW (Prime-Tass) -- State debt is expected to fall to 41 percent of gross domestic product this year, compared with 49.1 percent in 2001, Finance Minister Alexei Kudrin said Thursday. Previously, the government expected the debt to fall to 45 percent of GDP by the end of the year.

Foreign debt shrank 1.4 percent from $130.1 billion on Jan. 1 to $128.3 billion as of April 1, Kudrin said.

St. Pete Eurobonds

MOSCOW (Reuters) -- St. Petersburg is planning to issue Eurobonds worth around $110 million this year to refinance its outstanding debt, a city official said Thursday.

"In 1997 we issued Eurobonds with a 9.5 percent coupon. … We now want to issue five- or seven-year Eurobonds," Deputy St. Petersburg Governor Viktor Krotov said at a conference on municipal borrowing in Moscow.

The previous $300 million issue reaches maturity next month. Krotov said about $110 million of the bonds are outstanding.

Yukos, Mazheikiu Deal

VILNIUS, Lithuania (Reuters) -- Lithuania's Economy Ministry said Thursday the government had wrapped up talks with U.S. Williams and Yukos on a deal to give Russia's No. 2 oil producer more than a quarter of Lithuanian refiner Mazheikiu Nafta.

The deal represents a downstream expansion for Yukos and should give unprofitable Mazheikiu a new lease of life with an expected $150 million injection of funds badly needed for modernization to boost competitiveness and guaranteed crude supplies.

Lithuanian Deputy Economy Minister Nerijus Eidukevicius said if all goes well, it could go to the government for approval next week, after which necessary legal amendments would have to go through the government and parliament.

Gazprom Exits NRB

MOSCOW (Prime-Tass) -- Gazprom said Thursday it had sold its stake in the National Reserve Bank to the bank's shareholders.

Gazprom was estimated to hold more than 30 percent in the bank prior to the deal. The sale was part of Gazprom's strategic review of its assets that aims to dispose of non-core possessions.

Gazprom and NRB will remain partners, Gazprom said without elaborating.

Regional Borrowing

MOSCOW (Prime-Tass) -- The Finance Ministry plans on Monday to submit amendments to the Budget Code that will facilitate foreign borrowing by the regions to the government, Deputy Finance Minister Bella Zlatkis said Thursday.

She was speaking at a conference titled "Russia's Regions and Cities: Opportunities and Prospects for Borrowing" in Moscow.

The amendments would significantly liberalize the mechanisms of foreign borrowing by the regions but would leave restrictions for regions experiencing debt-management problems, Zlatkis said.

She did not provide further details concerning the expected changes to the Budget Code.

Under the existing regulations, the regions are allowed to tap international capital markets each year only in amounts not exceeding the amount of their foreign debts in a given year. The regulation was introduced after the 1998 financial crisis.

Tax and Spend

MOSCOW (Prime-Tass) -- The Finance Ministry will be able to fulfill all spending programs despite below-target tax collection, Finance Minister Alexei Kudrin said Thursday.

He said the problems with tax collection could only hurt the government's plans to accumulate financial reserve funds.

But Kudrin added that the government was satisfied with the level of tax collection and the Tax Ministry's work, because the shortfall in tax receipts was primarily due to a "not quite favorable" situation on world markets.

Oil Curb Unlikely

MOSCOW (Reuters) -- The government, winding down a deal with OPEC on oil export cuts, said Thursday it was unlikely to curb oil supplies again unless the price fell below $20 per barrel.

"We will not fight against world market trends. The government's basic position is that if prices stay above $20 per barrel we will not resume reductions," said Finance Minister Alexei Kudrin.

Kudrin's comments came just hours ahead of the Russian-U.S. summit in Moscow and St. Petersburg, during which President Vladimir Putin is expected to promote his country as one of the world's most reliable and predictable energy suppliers.

RTS Mixed

MOSCOW (Reuters) -- The stock market closed mixed Thursday with turnover concentrated in top oil shares LUKoil and Surgutneftegaz and utility Unified Energy Systems, with oils rising as Western fund inflows overruled nervy sellers, traders said.

The benchmark RTS index rose 0.35 percent to 415.50 on turnover of $26.04 million. The Reuters index of the MICEX exchange ended off 0.47 percent at 1,769.12 on turnover of 4.58 billion rubles ($146.5 million).

Traders said they expected continued volatility.

Speedy Re-registration

MOSCOW (Prime-Tass) -- The Tax Ministry will ensure speedy re-registration of all legal entities in Russia, which will be carried out in the second half of this year, Tax Minister Gennady Bukayev said Thursday.

He was speaking at a Finance Ministry-organized financial conference in Moscow.

Bukayev said new registration certificates would be given to legal entities within six days after their application for re-registration.

All legal entities in Russia are required to reregister in the second half of this year.