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Pressure is mounting on Russia’s economy as Western sanctions over the invasion of Ukraine take their toll and policymakers squabble over how to deal with the fallout.
The country’s central bank will hold an emergency interest rate-setting meeting tomorrow morning after saying today that it might raise interest rates to support the ruble after it fell below 100 per dollar. Export earnings have fallen and import dependency is increasing, while military spending is rising and inflation is rising.
The move prompted rare public disagreements among officials as the Kremlin sought to allay growing concerns about the currency, which has lost about 25 percent of its value this year, while continuing to praise the debt-fueled growth that had weakened the ruble.
“There is very little currency coming into the country, so a currency hunger has set in,” said Vladimir Milov, a former deputy energy minister who is now in exile opposed to the Kremlin. “Imports have now recovered to pre-war levels, only now we import all consumer and manufactured goods from China, Turkey, Central Asia and the Emirates and not from the West.” You still have to pay for it in some currency, but nobody wants rubles .”
New sanctions continue to be imposed, whether against government-related business figures or their access to foreign military assets. Russian companies are even forced to turn to Hong Kong for dispute resolution services as they are barred from Western courts.
However, there are some bright spots for Moscow.
Although oil and gas revenues fell more than 40 percent in the first seven months of the year due to embargoes and a price cap imposed by the G7 countries, they started to rise again in July.
Russia was also able to exploit loopholes around the ceiling. For example, a new FT analysis shows how inflated shipping costs have allowed Russian companies to earn far more on crude oil sales to India than previously thought.
In addition, Moscow has begun re-targeting Ukraine’s ability to export wheat, barley, corn and other grains — including today’s attacks on the Black Sea port of Odessa — to open up opportunities for domestic exports. Russia, already the world’s largest wheat exporter, had a record harvest in 2022/23 and this year’s harvest is expected to be another record one.
Worth knowing: Economy in Britain and Europe
Cornwall in south-west England is hoping to revive its dormant mining industry at the forefront with lithium, a material used in making batteries for electric vehicles.
UK ministers are planning 12 innovation-focused ‘investment zones’ to boost economic growth. Each zone will focus on existing research institutions and industrial clusters and receive up to £80m in support to attract further jobs and private investment.
Italy’s Prime Minister Giorgia Meloni said she took “full responsibility” for last week’s decision to impose a surprise tax on banks, which weakened her government’s credibility with investors. Here’s how the idea of windfall taxes is spreading from banks and energy to other sectors across Europe.
Worth knowing: world economy
Analysis by the Financial Times shows that Republican-controlled areas of the US US are the biggest beneficiaries of President Joe Biden’s push for clean energy technologies, despite their efforts to block his climate legislation.
Argentina devalued the peso by 18 percent to 350 per US dollar and will raise its interest rate by 21 percentage points to 118 percent after the right-wing extremist did so Javier Miley won a surprise victory in a primary for Argentina’s upcoming presidential election.
China works to reduce dependency on food imports by increasing corn and soybean production and cultivating more land. Increasing urbanization and a manufacturing boom have led to greater dependence on food imports in recent decades.
A new Big Read highlight Zambia seeks to capitalize on the looming shortage of copper, a key element of the global energy transition.
The African Development Bank admitted that his $55 million integrity fund, launched seven years ago with much fanfare to fight corruption, is still not operational.
Worth knowing: business
airlines In the US and Europe, planes are rushing to find spare parts and engines and avoid flight cancellations following a product recall by engine maker Pratt & Whitney.
Multinational companies turn to generative artificial intelligence to help manage supply chains affected by geopolitical tensions and to remove links to environmental and human rights abuses. Unilever, Siemens and Maersk, among others, use AI to negotiate contracts and find new suppliers.
The number of daily users of Twitter competes subjects on Android devices has declined by almost 80 percent in just over three weeks, illustrating the magnitude of the challenge facing app owners Meta.
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stupid phones, who can easily call and text are making a small comeback as concerns mount over smartphone-related issues like sleep disturbances and excessive online time.
demand for pawn shop According to the head of H&T Group, the country’s largest operator, the UK has reached “record levels” due to high inflation and a lack of alternatives.
The working world
British employers Companies are resorting to bidding wars to keep their staff, a new survey shows. This seems at odds with recent data suggesting the labor market is cooling. Last year, 40 percent of employers made a counter-offer to try to keep an employee who had received a job offer elsewhere.
The growing number of workers are concerned about this environmental issues presents bosses with a host of new challenges: from supporting employees with climate anxiety to hiring and retaining environmentally conscious employees.
Management editor Anjli Raval thinks bosses need to take the time to learn from defeats. A recording of Fail is the first step to dispassionately analyzing how something went wrong and how to improve, she argues.
Amazon has tracked the presence of US-based workers and specifically targeted those who appeared not to be complying with its hybrid labor policy. Employees are expected to be in the office at least three days a week.
Some good news
Scientists have discovered a whole new ecosystem of animals beneath the ocean’s hot springs, providing new evidence that life can exist in incredible places.
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