Last thread got deleted. Not sure why. Starting to think one of the mods beats it to stills of Vlad sitting at long tables.
But, things are deteriorating…badly. Russia looks on pace to set the all time record for fastest to go from world power to barter economy.
In May, the Yuan accounted for 54% of trading for the month. It’s now much higher with USD and Euro trading halted. Yuan supply at Russian banks is dwindling. Member banks had to take loans totaling 14.23 billion CN¥ from the RCB in the last week. And, it’s starting to look increasingly likely that trading of the yuan on Russian currency exchanges will be halted by the RCB in the coming days which will force the MOEX to halt yuan denominated trading, a move its already considering/knows it will likely be forced to make.
Puts China in a pretty tenuous position too. They have to keep up the flow of yuan to Russia, so russia can pay for Chinese imports. That means the barter relationship between the two gets more entrenched now, as Russia will likely turn to energy and materials exports to China to balance the ledger. The issue is compounded by the fact that the sanctions affect the NCC which registers/clears virtually all exchange transactions in Russia and through which Chinese bank arms domiciled in Russia normally have to operate. So, those banks will likely be forced to OTC markets for trading, or China will have to openly disregard the sanctions. Neither is ideal if you’re china.
Inflation is climbing again (up .75% m/m and 8.3% y/y), and now there is talk of bumping the RCB benchmark rate to 17-18% at July’s meeting. They can’t give away sovereign debt. An auction for 10-year bonds offering 12% coupons failed on Wednesday this week when the OFZ offering with a target raise of ₽550 billion managed to raise ₽20 billion (at an average discount of 270 bps) before being called by minister of finance for “lack of applications at acceptable price levels.” If that occurred in the US, the offering would be assigned in under 2 minutes at a significant premium.
Last week, a Stockholm tribunal ruled on the arbitration between Uniper (German NG supplier) and Gazprom in favor of Uniper and finding Gazprom in breech of contract. They ruled Gazprom owes $14 billion in damages incurred when they cut off supplies to Germany in ‘22. Uniper was forced to buy on the spot market as prices skyrocketed due in large part to Gazprom breaking contract and cutting off supply. They had to be bailed out and nationalized by the German gov. Ruling also allows Uniper to terminate future contracts that extend out to 2035. Really the only part of the ruling that matters, since it clears up a lot of uncertainty with IBs currently putting packages together to handle the privatization/re-IPO for uniper. Gazprom won’t pay, but it’s one more piece of a broader shitstorm for Russia.
Oh, and Russia has had to move SAM air defense batteries from the Kuril Islands to Crimea this week - a move that likely means Ukraine has destroyed a lot of russian air defense capabilities for which there are not available replacements. They wouldn’t be moving them from the Kurils to Vladivostok and then all the way across the country if they had options.
www.interfax.ru
www.moscowtimes.ru
But, things are deteriorating…badly. Russia looks on pace to set the all time record for fastest to go from world power to barter economy.
In May, the Yuan accounted for 54% of trading for the month. It’s now much higher with USD and Euro trading halted. Yuan supply at Russian banks is dwindling. Member banks had to take loans totaling 14.23 billion CN¥ from the RCB in the last week. And, it’s starting to look increasingly likely that trading of the yuan on Russian currency exchanges will be halted by the RCB in the coming days which will force the MOEX to halt yuan denominated trading, a move its already considering/knows it will likely be forced to make.
Puts China in a pretty tenuous position too. They have to keep up the flow of yuan to Russia, so russia can pay for Chinese imports. That means the barter relationship between the two gets more entrenched now, as Russia will likely turn to energy and materials exports to China to balance the ledger. The issue is compounded by the fact that the sanctions affect the NCC which registers/clears virtually all exchange transactions in Russia and through which Chinese bank arms domiciled in Russia normally have to operate. So, those banks will likely be forced to OTC markets for trading, or China will have to openly disregard the sanctions. Neither is ideal if you’re china.
Inflation is climbing again (up .75% m/m and 8.3% y/y), and now there is talk of bumping the RCB benchmark rate to 17-18% at July’s meeting. They can’t give away sovereign debt. An auction for 10-year bonds offering 12% coupons failed on Wednesday this week when the OFZ offering with a target raise of ₽550 billion managed to raise ₽20 billion (at an average discount of 270 bps) before being called by minister of finance for “lack of applications at acceptable price levels.” If that occurred in the US, the offering would be assigned in under 2 minutes at a significant premium.
Last week, a Stockholm tribunal ruled on the arbitration between Uniper (German NG supplier) and Gazprom in favor of Uniper and finding Gazprom in breech of contract. They ruled Gazprom owes $14 billion in damages incurred when they cut off supplies to Germany in ‘22. Uniper was forced to buy on the spot market as prices skyrocketed due in large part to Gazprom breaking contract and cutting off supply. They had to be bailed out and nationalized by the German gov. Ruling also allows Uniper to terminate future contracts that extend out to 2035. Really the only part of the ruling that matters, since it clears up a lot of uncertainty with IBs currently putting packages together to handle the privatization/re-IPO for uniper. Gazprom won’t pay, but it’s one more piece of a broader shitstorm for Russia.
Oh, and Russia has had to move SAM air defense batteries from the Kuril Islands to Crimea this week - a move that likely means Ukraine has destroyed a lot of russian air defense capabilities for which there are not available replacements. They wouldn’t be moving them from the Kurils to Vladivostok and then all the way across the country if they had options.
Àóêöèîí ïî ðàçìåùåíèþ ÎÔÇ 26245 ïðèçíàí íåñîñòîÿâøèìñÿ
Ìèíèñòåðñòâî ôèíàíñîâ Ðîññèè 19 èþíÿ ïðèçíàëî íåñîñòîÿâøèìñÿ àóêöèîí ïî ïðîäàæå ÎÔÇ-ÏÄ ñåðèè 26245 â ñâÿçè ñ îòñóòñòâèåì çàÿâîê ïî ïðèåìëåìûì óðîâíÿì öåí, ãîâîðèòñÿ â ñîîáùåíèè Ìèíôèíà.
www.interfax.ru
ЦБ готовится к остановке биржевых торгов юанем вслед за долларом и евро - Русская служба The Moscow Times
Российский валютный рынок, уже лишенный биржевых торгов долларом и евро, может остаться без последнего крупного «живого» сегмента — операций с китайским юанем.Банки КНР, от которых зависят юаневые торги, вероятнее всего, начнут постепенно сворачивать сотрудничество с Национальным клиринговым...
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