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. Last Updated: 07/27/2016

Business in Brief

UAC Defends Strategy

United Aircraft Corporation president Alexei Fyodorov defended his company’s loss-making strategy on  Thursday, saying that if the company didn’t make planes no one would.

Fyodorov was responding to criticism earlier this week by Prime Minister Vladimir Putin, who called the industry “undisciplined.”

“If we don’t make planes for two years, there will be nobody to make new products,” Fyodorov said, referring to the new models developed by the corporation, Interfax reported. While Il-96 planes are not loss-making, every Tu-204 plane has a net cost of about 200 million rubles ($6.3 million). (MT)

Gazprom Storage Deal

Gazprom and Abu Dhabi National Energy, the state-controlled oil and gas producer known as Taqa, signed an agreement Thursday for gas storage services at the Bergermeer storage site in the Netherlands.

Gazprom will deliver cushion gas for injection into the depleted field in return for working capacity and a participating interest in operating the facility, the companies said in a joint statement. Cushion gas is necessary to ensure that the reservoir has optimal pressure to start commercial storage operations.

Bergermeer has a storage capacity equivalent to the annual gas consumption of about 1.6 million households in the Netherlands, making it one of Western Europe’s largest. (Bloomberg)

Ulyukayev Sees Weak Dollar

The Central Bank sees grounds for the dollar to weaken against “a large number of currencies” soon as appetite for risk returns, First Deputy Chairman Alexei Ulyukayev said Thursday.

“Exiting the crisis means lower demand for safer assets and increased demand for riskier, more profitable ones,” he said in an interview with Prime-Tass. “We can say that risk appetite is returning.” His comments were confirmed by a Central Bank spokesman.

“In the short term, there are grounds to think the dollar’s exchange rate will decline,” Ulyukayev said. The share of U.S. Treasuries in Russia’s reserves remains stable at more than 30 percent, he said. (Bloomberg)

Retail Sales Drop Sharply

Retail sales dropped the most in almost 10 years in July, sliding for a sixth consecutive month, as households cut back spending after incomes dropped and consumer borrowing declined, the State Statistics Service said Thursday.

Sales slid 8.2 percent from a year earlier after declining 6.5 percent in June, the service said. That was more than the median forecast of 16 economists surveyed by Bloomberg for a 7.1 percent drop. Retail sales were up 1.9 percent on the month. (Bloomberg)

For the Record

  • The unemployment rate was unchanged in July after falling for four consecutive months as seasonal demand for labor in farming and construction picked up and after industrial output rebounded, the State Statistics Service said Thursday. (Bloomberg)
  • TNK-BP said Thursday that it planned to increase crude extraction at its Uvat fields in Siberia by 29 percent in the fourth quarter. (Bloomberg)
  • Russia’s international reserves fell $2.8 billion on Thursday, the most in more than a month, as the Central Bank defended the ruble. (Bloomberg)