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. Last Updated: 07/27/2016

More Business Headlines

Aeroflot Reacts to Weak Ruble With 5% Price Cuts on International Fares

State airline Aeroflot has responded to the weakening of the Russian ruble by reducing the price of euro-denominated international flights from Russia by 5 percent, effective from Feb. 5, the company said in a press release Wednesday.

The move tries to compensate passengers for the rise in the the cost of transportation brought on be the travails of the ruble, which has fallen by over 7 percent since the beginning of the year.

Aeroflot said it has been working with government bodies and other Russian carriers for years to stop publishing fares for international flights in euros, as it tethers the transportation costs borne by Russian consumers to foreign currencies, but that its efforts have been unsuccessful.

The company hopes its price cut will stimulate demand during the low season and avert underutilization of capacity. (MT)

Unsecured Retail Lending Growth Falls Sharply

The growth of unsecured retail lending in Russia is slowing sharply, underlining weak performance in a consumer sector that many have hoped could in future wean the country's economy off excess reliance on oil and mineral exports.

Citing data from Frank Research Group, Kommersant reported that retail loans in the country last year grew by 29 percent, compared to about 43 percent the year before.

The pace of growth has slowed throughout the year. In September, the rate was 37.3 percent, down from 60 percent a year earlier, according to an October report in Vedomosti.

The unsecured lending market, which includes cash loans, credit cards and loans provided with the purchase of goods, was worth 6.39 trillion rubles ($182 billion) in Russia in 2013, Kommersant reported. (RIA Novosti)

Central Bank Shifts Ruble Trading Corridor

The Central Bank has shifted its target exchange rate corridor for the ruble by 10 kopecks, following market interventions to curb the pace of the currency's decline.

The new corridor extends from 34.40 to 41.40 rubles to the Central Bank's dollar-euro currency basket as of Feb.4, compared to 34.30 to 41.30 previously.

Under its managed float, the Central Bank increases its interventions as the ruble approaches the boundary of the corridor. Once an intervention allotment of $350 million is exhausted it automatically shifts the corridor.

The ruble's rate to the basket for Thursday was fixed by the Central Bank at 40.47 rubles. (Reuters)

Domestic Bond Auctions Cancelled for Second Week Running

The Finance Ministry cancelled its weekly domestic bond auctions for the second week in a row Tuesday, saying in a statement the decision was "based on an analysis of current market conditions."

Yields on so-called OFZ bonds have risen by 70 to 80 basis points since the start of the year. A new ministry sale could have potentially pushed the rates higher, analysts said.

Emerging markets such as Russia have been hit hard this year by outflows from investors following the U.S. Federal Reserve's tapering of its monetary stimulus.

The decision to cancel the auction was seen as a tactical move not to pay excessive yields and had virtually no impact on bond prices. The ministry has cancelled auctions before, waiting for better market conditions. (Reuters)

Gazprom Neft to Start Pumping Oil at Iraq's Badra Field from Spring

Gazprom Neft plans to start commercial oil production in spring at its Badra oil field in Iraq and hopes for an average output of 15,000 barrels per day this year, a company official said Wednesday.

Gazprom Neft, the oil arm of top Russian gas producer Gazprom, earlier postponed initial production at Badra due to safety concerns and logistical problems.

"We plan to start production in spring … the target of this year is to reach output of 15,000 barrels per day," Vadim Yakovlev, a first deputy chief executive of Gazprom Neft, told reporters. (Reuters)

Putin Awarded Kalashnikov Prize for Achievements in Engineering

The 2013 Kalashnikov Prize for achievements in engineering has been awarded to President Vladimir Putin, a government newspaper reported.

Rossiiskaya Gazeta said the organizing committee chose Putin as the winner to honor his role in creating the Kalashnikov Concern, which is one of the world's biggest firearm manufacturers and produces 95 percent of Russia's small arms.

The prize, worth 50,000 rubles ($1,400) and named after AK-47 assault rifle inventor Mikhail Kalashnikov, is annually awarded to individuals and research teams in recognition of outstanding achievements in engineering and manufacturing of machinery. It was established in 1999 in Udmurtia, Kalashnikov's home region.

The winner of the Kalashnikov Prize was chosen late last year, but the committee had to postpone the announcement following Kalashnikov's death on Dec. 23. (RIA Novosti)

Former EBRD Russia Chief Charged With Seeking $1.4M Bribe

Yelena Kotova, Russia's former top representative at the European Bank for Reconstruction and Development who has been charged with seeking a bribe of $1.4 million, pleaded not guilty in court on Wednesday, RAPSI reported.

Igor Lebedev, a former top manager of a leading Russian bank, also denied charges against him. The court will examine evidence and question some foreign witnesses on February 12.

The Interior Ministry announced last January that Kotova and Lebedev had been charged with abuse of office and using their ties in the business community to solicit funds from a Canadian oil company.

Kotova was one of four Russian officials assigned to the EBRD who came under investigation for alleged corruption two years ago and had their diplomatic immunity revoked. (RIA Novosti)

Olympic Committee Signs Deal With Bookmaker to Curb Fixing

Gambling company Betfair has signed an information sharing agreement with the International Olympic Committee to support efforts to prevent betting corruption from tarnishing the Games.

The Olympics, both winter and summer, have not traditionally attracted a lot of interest from gamblers and have been free of the fixing scandals seen elsewhere in sports such as soccer and cricket.

However, the IOC is aware of the threat of fixing and will operate a new centralized system at the Sochi Winter Games starting this week to monitor betting patterns in coordination with gambling companies.

"The interests of sports governing bodies, like the IOC, and Betfair are completely aligned in wanting to ensure customers can bet in fair, transparent and secure markets on exciting sporting events," Betfair spokesman James Midmer said Tuesday. (Reuters)

Draft Bill Proposes Special Shops for Sale of 18+ Video Games

Draft legislation to permit the sale of video games marked 18+ only in special shops was submitted to the Russian parliament on Tuesday, reported.

The bill stipulates that 18+ video games and other adult content should not be sold in places where children can easily access them.

The bill's author, lawmaker Oleg Mikheyev of the A Just Russia party, says in an explanatory note that 18+ video games are a major reason behind a recent surge in violence among minors.

"Children should not be allowed into places where such products are being sold. It is the same principle as in sex shops — a child entering the area should 'send up a red flag' for a security guard," Mikheyev said. (RIA Novosti)

Number of Amnestied Businessmen Rises to 2,300

More than 2,300 Russians convicted of economic crimes have been amnestied since July, according to a news release from the business ombudsman's office obtained by RAPSI.

The amnesty was approved on July 2 last year by the State Duma, the lower house of the parliament.

Under its terms, people serving prison sentences — as well as non-custodial or suspended sentences — for economic crimes were to be amnestied over a period of six months on one condition: that they compensated any damages incurred by their actions.

An estimated 100,000 Russians are currently in jail for economic crimes. (RIA Novosti)

Service Sector Growth Slows Sharply as Manufacturing Contracts

Growth in the services sector dropped sharply in January, slowing almost to a stop, the HSBC Purchasing Managers' Index showed Wednesday.

The PMI for the services sector was 50.2 points in January, down from 53.6 points in the previous month.

Index values above 50 points correspond to increasing business activity, while values below that mark represent shrinkage.

On Monday, HSBC said that the contraction of Russia's manufacturing sector was deepening — the PMI was 48 points in January, having been 48.8 in December. (MT)