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First Post
02-06-2025
- Business
- First Post
Russia's Central Bank chief under pressure to cut interest rates amid economic strain of war, sanctions
The Russian central bank's key interest rate has stood at 21% since October, aimed at taming inflation that peaked above 10 per cent late last year, well above the 4% target read more Russia's President Vladimir Putin meets with representatives of the Russian business circles in Moscow on May 26, 2025. (Photo: AFP) Russia's central bank governor, Elvira Nabiullina, is under growing pressure from the Kremlin to cut interest rates as businesses struggle with record-high borrowing costs and signs of economic strain outside the military sector mount. Government officials expect Nabiullina to lower the benchmark rate soon, possibly as early as Friday's central bank meeting, Bloomberg reported, citing three people familiar with internal discussions. The shift in tone marks a reversal from last November, when Finance Minister Anton Siluanov supported rate hikes to combat soaring inflation. Nabiullina, 61, was credited with stabilising the economy in the wake of Russia's 2022 invasion of Ukraine, deploying capital controls and other measures to stave off collapse. She continues to enjoy the support of President Vladimir Putin. STORY CONTINUES BELOW THIS AD But the central bank's key interest rate has stood at 21 per cent since October, aimed at taming inflation that peaked above 10 per cent late last year, well above the 4 per cent target. That policy has helped cool inflation, with the seasonally adjusted annualized rate falling to 6.2 per cent in April, down from 10.7 per cent in January, according to a central bank report published May 27. Still, economists warn the drop in inflation may not be stable, as it has largely been driven by a stronger ruble. 'The challenge for the central bank now lies in choosing between two risks,' said Olga Belenkaya, head of macroeconomic analysis at Finam in Moscow. 'Keeping the rate unchanged risks a recession, while a cut could reignite inflation.' High interest rates are already squeezing large parts of the economy. Industrial firms, especially those not tied to military production, are scaling back investment. Severstal PJSC, one of Russia's largest steelmakers, posted a negative cash flow of 33 billion rubles ($421 million) in the first quarter, compared to a positive figure of the same amount a year earlier. The company said the high cost of borrowing has delayed customer projects and forced it to rely on cash reserves to fund operations. Severstal said a rate cut to at least 15 per cent would be necessary to normalise conditions. Dozens of major firms have cancelled dividend payments for 2024, and broader signs of a slowdown are emerging. Civilian goods production fell 0.8 per cent monthly during the first quarter, hitting its lowest level since April 2023, according to an April report by the Center for Macroeconomic Analysis and Short-term Forecasting in Moscow. STORY CONTINUES BELOW THIS AD Adding to economic pressure, revenues from oil and gas exports are slipping amid lower global crude prices and a stronger ruble. Authorities have already revised budget forecasts and more than tripled the fiscal deficit target. To ease the burden on struggling businesses, the central bank last month recommended that lenders restructure loans and temporarily lowered reserve requirements on restructured credit. As officials push for rate relief, the central bank faces a delicate balancing act between supporting growth and keeping inflation in check. All eyes are now on Friday's decision.
Daily Mail
27-05-2025
- Business
- Daily Mail
Russia's stock market takes sharp dive after Trump's insult to Putin
President Donald Trump's criticism of Russian President Vladimir Putin sent shockwaves through the Russian economy on Monday. Russia's stock market fell more than 2 percent after Trump appeared to lose patience with Putin, calling him 'crazy' and threatened new sanctions over Moscow 's escalation of attacks on Ukraine. The Moscow Exchange (MOEX) index dropped to 2,711 points by 5:30 p.m. local time, down from its opening level of 2,735, according to the Moscow Times. The investment firm Finam said that Trump's remarks were responsible for spooking the markets. Trump was considering new sanctions against Moscow after Putin's attacks on Ukraine, The Wall Street Journal reported , in response to Russia's apparent lack of interest in a peace deal to end the war. 'He's killing a lot of people,' Trump said to reporters about Putin. 'I don't know what's wrong with him. What the hell happened to him?' European leaders are growing more impatient with Trump's attempt to bring peace between the two countries, convinced that Putin is just stringing the president along. French President Emanuel Macron seized the opportunity to savage Putin on Monday after President Donald Trump expressed dissatisfaction with the Russian president. Macron suggested that Putin had tricked Trump by engaging in diplomatic talks surrounding a peace deal, even after meeting with his envoy Steve Witkoff on four different occasions . 'President Trump realizes that when President Putin said on the phone he was ready for peace, or told his envoys he was ready for peace, he lied,' Macron said during a visit to Hanoi, Vietnam. Macron indicated he wanted Trump to do more against Putin . 'We have seen once again in recent hours Donald Trump express his anger. A form of impatience. I simply hope now that this translates into action,' he said. Putin launched three days of attacks in recent days launching hundreds of drones and several missiles across Ukraine. On Monday, Russia sent at least 355 drones into Ukraine alone and launched nine missiles. 'What's happening in Ukraine is unacceptable and extremely serious. You can't say you're ready to talk and then bomb,' Macron said. Russia said the attacks was a response to ongoing Ukrainian attacks against Russia. 'We have seen how the Ukrainians have been hitting our social infrastructure, peaceful infrastructure. This is a response strike. It's a strike against military facilities, military targets,' a Kremlin spokesperson said . Trump expressed his frustration with Putin during a conversation with reporters after returning to Washington, DC on Sunday and in a post on social media. 'I've always had a very good relationship with Vladimir Putin of Russia, but something has happened to him. He has gone absolutely CRAZY!,' Trump wrote, complaining that Putin was 'needlessly killing a lot of people .' 'Missiles and drones are being shot into Cities in Ukraine, for no reason whatsoever ,' Trump added and said Putin's war in Ukraine could lead to the 'downfall of Russia.' Trump spoke personally with Putin last week about the proposal for peace, which the president hailed as an important step forward for peace. But Putin's actions drew criticism from Trump. The Kremlin responded to Trump's accusations by suggesting he was reacting emotionally . 'This is a very crucial moment, which is associated with an emotional overload for absolutely everyone and with emotional reactions,' Kremlin spokesman, Dmitri Peskov told reporters on Monday.
Daily Mail
27-05-2025
- Business
- Daily Mail
Trump knocks $1 billion off Russian stock market by calling Putin 'absolutely CRAZY'
President Donald Trump's criticism of Russian President Vladimir Putin sent shockwaves through the Russian economy on Monday. Russia 's stock market fell more than 2 percent after Trump appeared to lose patience with Putin, calling him 'crazy' and threatened new sanctions over Moscow 's escalation of attacks on Ukraine. The Moscow Exchange (MOEX) index dropped to 2,711 points by 5:30 p.m. local time, down from its opening level of 2,735, according to the Moscow Times. The investment firm Finam said that Trump's remarks were responsible for spooking the markets. Trump was considering new sanctions against Moscow after Putin's attacks on Ukraine, The Wall Street Journal reported, in response to Russia's apparent lack of interest in a peace deal to end the war. 'He's killing a lot of people,' Trump said to reporters about Putin. 'I don't know what's wrong with him. What the hell happened to him?' European leaders are growing more impatient with Trump's attempt to bring peace between the two countries, convinced that Putin is just stringing the president along. French President Emanuel Macron seized the opportunity to savage Putin on Monday after President Donald Trump expressed dissatisfaction with the Russian president. Macron suggested that Putin had tricked Trump by engaging in diplomatic talks surrounding a peace deal, even after meeting with his envoy Steve Witkoff on four different occasions. 'President Trump realizes that when President Putin said on the phone he was ready for peace, or told his envoys he was ready for peace, he lied,' Macron said during a visit to Hanoi, Vietnam. Macron indicated he wanted Trump to do more against Putin. 'We have seen once again in recent hours Donald Trump express his anger. A form of impatience. I simply hope now that this translates into action,' he said. Putin launched three days of attacks in recent days launching hundreds of drones and several missiles across Ukraine. On Monday, Russia sent at least 355 drones into Ukraine alone and launched nine missiles. 'What's happening in Ukraine is unacceptable and extremely serious. You can't say you're ready to talk and then bomb,' Macron said. Russia said the attacks was a response to ongoing Ukrainian attacks against Russia. 'We have seen how the Ukrainians have been hitting our social infrastructure, peaceful infrastructure. This is a response strike. It's a strike against military facilities, military targets,' a Kremlin spokesperson said. Trump expressed his frustration with Putin during a conversation with reporters after returning to Washington, DC on Sunday and in a post on social media. 'I've always had a very good relationship with Vladimir Putin of Russia, but something has happened to him. He has gone absolutely CRAZY!,' Trump wrote, complaining that Putin was 'needlessly killing a lot of people.' 'Missiles and drones are being shot into Cities in Ukraine, for no reason whatsoever,' Trump added and said Putin's war in Ukraine could lead to the 'downfall of Russia.' Trump spoke personally with Putin last week about the proposal for peace, which the president hailed as an important step forward for peace. But Putin's actions drew criticism from Trump. reacting emotionally. 'This is a very crucial moment, which is associated with an emotional overload for absolutely everyone and with emotional reactions,' Kremlin spokesman, Dmitri Peskov told reporters on Monday.
Miami Herald
27-05-2025
- Business
- Miami Herald
Russia Sees $1 Billion Wiped off Stock Market After Trump's Putin Comments
Russia's stock market took a sharp dive following President Donald Trump's jibe that Vladimir Putin was "crazy" and threatening new sanctions. Vasily Astrov, an expert on Russia's economy, told Newsweek Tuesday that Trump makes contradictory comments on Russia almost daily, which causes stock market volatility. Trump issued the insult in a social media post—in which he also scolded Ukrainian President Volodymyr Zelensky—after Russia launched a massive aerial attack on Ukraine. The Russian financial services outlet Finam said Monday, the Moscow Exchange (MOEX) was "gripped by negative sentiment" as it fell over 2 percent, which led to market capitalization falling by a reported 100 billion rubles ($1.1 billion). Newsweek has contacted the Kremlin for comment. Trump's rhetoric on the war in Ukraine started by Putin is continuously shifting, and his latest comments followed a warning that the U.S. leader would be stepping back from peace talks if there is no progress. Kyiv, its allies and experts see U.S. sanctions on Russia, particularly on its fossil fuels, as key to pressuring Putin to the table and Trump's post threatening such measures will add to market jitters in the country's war economy. Trump took to Truth Social after Russia launched a massive attack on Ukraine over the weekend, with Moscow firing drones and missiles at 30 cities and villages and killing at least 12 people, including three children. Trump's post on Sunday boasted of his good relationship with Putin but said that the Russian president "has gone absolutely CRAZY" and was "needlessly killing" soldiers and civilians. Trump said that if Putin tries to take all of Ukraine "it will lead to the downfall of Russia," in the post which also took aim at Zelensky for "talking the way he does." The Kremlin responded by saying that the outburst was down to "emotional overstrain." Russia's stock market had fallen by 2.06 percent by 2.30 p.m. local time Monday, dropping to 2,711 points from its opening level of 2,735. By close of trading, it went down to 2,699, although by mid-morning Tuesday, there was a slight rise to 2,718. Sovcomflot—Russia's largest shipping company—had the biggest drop of more than 5 percent, while shares in energy and metals giant En+ Group, state-run Gazprom and tech firm VK Group also fell. Financial services outlet Finam said one of the main reasons for the drop was the geopolitical tensions following Trump's comments, which suggest that he is still considering tougher sanctions against Russia. The outlet also said the economic situation in Russia is "alarming" and that the reporting season for the first quarter has shown that even stable businesses are going through difficult times, affected by western sanctions, and the tight monetary policy of Russia's Central Bank, whose key interest rate is at 21 percent. Adding to pressure are reports that the EU is preparing to disconnect another 20 Russian banks from the SWIFT international payments system. Astrov, senior economist at The Vienna Institute for International Economic Studies, said that the slump in the stock market is "definitely the result of Trump's comments" rather than the prospect of EU action. U.S. President Donald Trump on Truth Social: "I've always had a very good relationship with Vladimir Putin of Russia, but something has happened to him. He has gone absolutely CRAZY!" Vasily Astrov of the Vienna Institute for International Economic Studies said of the stock market slump: "This is definitely the result of Trump's comments, not EU sanctions…EU sanctions…had already been priced in—whereas Trump's statements on Russia contradict each other almost on a daily basis and result in Russia's stock market volatility." Financial services outlet Finam: "The Russian stock market is gripped by negative sentiment." The war Putin started is tied to Russia's currency and stock markets which took a hit in April following the collapse of scheduled ceasefire negotiations over the war in Ukraine. There is anticipation over whether Trump's warning will lead to sanctions that might add to further turbulence in Russia's economy. Related Articles Ukrainian MiG-29 Fighter Jets Bomb Russian Special Services BaseChina Denies Ukraine's Russia Weapons ClaimRussian Bots Roast 'Clown' Donald Trump After Putin CommentsMAGA Divided as Trump Turns on Putin 2025 NEWSWEEK DIGITAL LLC.
Newsweek
27-05-2025
- Business
- Newsweek
Russia Sees $1 Billion Wiped off Stock Market After Trump's Putin Comments
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. Russia's stock market took a sharp dive following President Donald Trump's jibe that Vladimir Putin was "crazy" and threatening new sanctions. Vasily Astrov, an expert on Russia's economy, told Newsweek Tuesday that Trump makes contradictory comments on Russia almost daily, which causes stock market volatility. Trump issued the insult in a social media post—in which he also scolded Ukrainian President Volodymyr Zelensky—after Russia launched a massive aerial attack on Ukraine. The Russian financial services outlet Finam said Monday, the Moscow Exchange (MOEX) was "gripped by negative sentiment" as it fell over 2 percent, which led to market capitalization falling by a reported 100 billion rubles ($1.1 billion). Newsweek has contacted the Kremlin for comment. A stock image of a screen showing benchmark ruble-denominated MOEX index numbers in Moscow on January 10, 2023. A stock image of a screen showing benchmark ruble-denominated MOEX index numbers in Moscow on January 10, It Matters Trump's rhetoric on the war in Ukraine started by Putin is continuously shifting, and his latest comments followed a warning that the U.S. leader would be stepping back from peace talks if there is no progress. Kyiv, its allies and experts see U.S. sanctions on Russia, particularly on its fossil fuels, as key to pressuring Putin to the table and Trump's post threatening such measures will add to market jitters in the country's war economy. What To Know Trump took to Truth Social after Russia launched a massive attack on Ukraine over the weekend, with Moscow firing drones and missiles at 30 cities and villages and killing at least 12 people, including three children. Trump's post on Sunday boasted of his good relationship with Putin but said that the Russian president "has gone absolutely CRAZY" and was "needlessly killing" soldiers and civilians. Trump said that if Putin tries to take all of Ukraine "it will lead to the downfall of Russia," in the post which also took aim at Zelensky for "talking the way he does." The Kremlin responded by saying that the outburst was down to "emotional overstrain." Russia's stock market had fallen by 2.06 percent by 2.30 p.m. local time Monday, dropping to 2,711 points from its opening level of 2,735. By close of trading, it went down to 2,699, although by mid-morning Tuesday, there was a slight rise to 2,718. Sovcomflot—Russia's largest shipping company—had the biggest drop of more than 5 percent, while shares in energy and metals giant En+ Group, state-run Gazprom and tech firm VK Group also fell. Financial services outlet Finam said one of the main reasons for the drop was the geopolitical tensions following Trump's comments, which suggest that he is still considering tougher sanctions against Russia. The outlet also said the economic situation in Russia is "alarming" and that the reporting season for the first quarter has shown that even stable businesses are going through difficult times, affected by western sanctions, and the tight monetary policy of Russia's Central Bank, whose key interest rate is at 21 percent. Adding to pressure are reports that the EU is preparing to disconnect another 20 Russian banks from the SWIFT international payments system. Astrov, senior economist at The Vienna Institute for International Economic Studies, said that the slump in the stock market is "definitely the result of Trump's comments" rather than the prospect of EU action. What People Are Saying U.S. President Donald Trump on Truth Social: "I've always had a very good relationship with Vladimir Putin of Russia, but something has happened to him. He has gone absolutely CRAZY!" Vasily Astrov of the Vienna Institute for International Economic Studies said of the stock market slump: "This is definitely the result of Trump's comments, not EU sanctions…EU sanctions…had already been priced in—whereas Trump's statements on Russia contradict each other almost on a daily basis and result in Russia's stock market volatility." Financial services outlet Finam: "The Russian stock market is gripped by negative sentiment." What Happens Next The war Putin started is tied to Russia's currency and stock markets which took a hit in April following the collapse of scheduled ceasefire negotiations over the war in Ukraine. There is anticipation over whether Trump's warning will lead to sanctions that might add to further turbulence in Russia's economy.
