Good pace. Russian Central Bank spends nearly $40 billion in reserves in a month

3 April, 05:01 PM

We’re witnessing the decline of the Russian economy in real mode.

1. Russian media published the results of a survey of small and medium business owners, according to which 83% of companies reduced their expenses in March (especially on advertising, IT, and rent). At least 16% of respondents announced a reduction in salaries for employees, while 23% have started lay-offs.

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Kyiv School of Economics and the Gradus sociological research company conducted a similar survey in Ukraine.

2. The Central Bank of Russia spent nearly $40 billion in reserves in a month. A good pace. In total, Russia has $604 billion left, of which at least $415 billion are frozen in foreign accounts.

In April, Russia will have to use no fewer reserves to compensate for budget expenditures, pay off external debts, and fend off the "official" devaluation of the ruble. At this rate, the money could run out in the fall.

3. Russians wanted everyone to pay them rubles for energy. Nobody agreed. Then Russia said it was ready to accept euros/dollars, but with a current account in a Russian bank (Gazprombank). Nobody has agreed yet. Then Russia said OK, we will not "turn off" the gas for now.

This is a rather subtle aspect in terms of sanctions. Indeed, Russia "bluffs and scares" and tests the determination of European leaders on whether they are ready to leave their economies without energy.

On the other hand, Europe must be tough toward the aggressor country, despite the risks to national economies in the region. Probably, they will find a solution, under the sauce "we can't just terminate contracts" – this is modern Europe. Until the first missiles explode on their territory.

4. Not only capital and common sense are leaving the territory of Russia, but also guest workers. Uzbeks, Kazakhs, Armenians, Tajiks – they are all taking their families and leaving for their homeland or other countries to look for work. The Russian ruble in the cash market has taken a beating against satellite currencies, and making money transfers has become more difficult.

It is interesting to consider who will clean Moscow streets, serve in restaurants and cafes, trade in markets or bring in gray imports. Russians will obviously be looking for part-time jobs, so will replace guest workers.

5. JP Morgan won a trial to confiscate the yacht of Russian oligarch Dmitry Pumpyanskiy in Gibraltar. The fact is that Pumpyanskiy, who has previously been sanctioned, cannot guarantee the collateral provided by the bank, either with his property or with his money in his accounts, because everything is blocked. Therefore, the U.S. bank played it safe and took the yacht as collateral. A very interesting case, I'm looking forward to repeating such stories with other banks and oligarchs.

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