Russian Economic News Friday July 17, 2009

Summary:

• Russia's reserves have declined significantly to prevent reduction in ruble's value
  
• Depreciation was due to reduction in in oil prices

From... Deutsch Bank Morning Comment:

Headline: CBR Reserves Contract by Over $8B USD in the Week Ending 10 July

• Russia's forex reserves declined by $8.4B USD to reach $4007B
  
• Valuation effects not significant – implies that the change in CBR reserves was due to interventions by the CBR
  
• Last week marked by sizeable ruble depreciation due to reduction in oil prices
  
• CBR intensified Forex interventions; $2B to support ruble
  
• Implies further reduction in CBR reserves

Russian Economic News Wednesday July 15, 2009

Summary:

• Ruble depreciation attributed to declining oil prices – budget deficits and tight liquidity may possibly prevent acceleration of depreciation
  
• PPI has increased significantly over the past month signaling a build up of inflationary pressure.

From... Troika Dialogue Russia Market Daily:

Headline: Ruble Depreciation May Half as Excessive Free Liquidity Evaporates

• Recent ruble depreciation triggered by declining oil prices
  
• The increase exchange rate sensitivity to oil prices is connected to the ruble liquidity injection through budget channels
  
• Budget ran a significant deficit in June, banking accumulated more than R1.1T in deposits
  
• Since banking system is demonstrating increased demand for rubles, and oil prices are increasing, ruble is not expected to fall dramatically
  

From... Business New Europe Daily News Letter:

Headline: PPI Hits 2.2% in June

• PPI Growth points to a build up of inflationary pressure – producer prices increased by 2.2% MoM – significantly over the 1.3 MoM estimate
  
• Suggests that the inflationary pressures have stared to build up
  
• CPI rate has lagged behind closing at 7.4% YTD
  
• Oil and Gas prices push PPI up – wholesale prices rose 14.3%