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    Russian Economy General News: #13

    Kiko
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    Post  Kiko Sun Sep 04, 2022 3:47 pm

    What will happen to the ruble and dollar in the fall, by Irina Krasikova for RIANOVOSTI. 09.04.2022.

    In the fall, payments by the state and companies on external debts fall; on the eve of the New Year holidays, demand for imported goods rises, so the ruble traditionally weakens. However, anti-Russian sanctions have made adjustments: the currency of friendly countries is increasingly used in mutual settlements, personal savings from dollars and euros are being converted into yuan. What will be the exchange rate as a result - understood RIA Novosti.

    For all parallel imports

    In March, the dollar soared to 120 rubles. However, at the end of June, it fell to 50 - at least in seven years. Euro - up to 52.

    As a result, under the conditions of sanctions and sharply sagging imports, the exchange rate stabilized around 60.

    But this is not beneficial for the state. The budget is formed, among other things, through taxes on exporters. Their revenue decreases - less money in the treasury. The weakening of the dollar in the domestic market by one ruble - minus 200 billion.
    According to First Deputy Prime Minister Andrey Belousov, the optimal exchange rate for industry is 70-80. "Fifty-five-sixty is too much. Especially against the backdrop of deflation and high interest rates," he explained.

    In autumn, several factors will affect the situation. First of all, the growth of parallel imports, which has already reached six and a half billion dollars, as noted by Deputy Prime Minister, Minister of Industry and Trade Denis Manturov.

    16 billion are expected by the end of the year. As a result, the export-skewed trade balance will be corrected. And this will weaken the ruble.

    Meanwhile, the demand for the currency has not yet recovered. According to the Central Bank, the current account surplus in July exceeded $28 billion, the same as a month earlier.

    “As stocks of goods in trade and production run out, imports increase. Plus, people return from vacations and resume shopping,” explains Mark Goykhman, chief economist at the TeleTrade information and analytical center.

    minus dollar and euro

    Another factor is the rejection of "toxic" dollars and euros, the transition to payments in alternative currencies. In Russia, this figure has already reached 75 percent.

    The rest of the BRICS countries are moving in the same direction. In July, the yuan took the fifth place in international trade - more than two percent.

    Ahead is still the dollar - the main reserve currency. Of course, in a few months he will not lose this status. However, due to the policy of the West, he is less and less trustworthy. And no one wants to risk assets - neither the population, nor even the state.

    Everyone understood that the US and the EU could block the savings of another country at any time. Half of Russia's foreign exchange reserves were frozen, banks were disconnected from SWIFT.

    On the other hand, adds Goykhman, one should not forget about the general strengthening of the dollar in the world due to the tightening of the monetary policy of the US Federal Reserve System. If the discount rate is again raised by 0.75 percentage points on September 21, the US currency will rise in price.

    And the Russian regulator is not idle. In the first ten days of September, Rosstat will publish data on prices for August. If deflation continues, which has been fixed since the beginning of summer, the key rate will be lowered by 0.23-0.5 points, analysts believe. With a corresponding weakening of the ruble.

    In addition, in the fall, the Ministry of Finance may return to the market with an updated budget rule in order to again buy foreign currency on the stock exchange for oil and gas windfalls. This was mentioned in the report of the Central Bank on the prospects for monetary policy for the next three years.

    For the benefit of the budget

    Much still depends on oil prices. Experts do not rule out $100 for Brent and even higher if the increase in production by OPEC+ countries slows down. Well, gas continues to break records, contributing to the increase in Russia's foreign exchange earnings, despite the reduction in exports. Last week, September futures in Europe reached $3,500 per thousand cubic metres.

    It also plays into the hands of the ruble that banks are trying to minimize the turnover of "toxic" currency: they take a commission from customers, complicate transfers. This forces the population to get rid of dollars and euros.

    The volume of dollar transactions on the Moscow Exchange fell significantly. For comparison: on February 15 there were such transactions for 405.8 billion rubles, on July 15 - 119.4 billion.

    Russians are converting their savings into an alternative currency, mainly the yuan.

    Previously, such exotic deposits were offered by no more than ten credit institutions. Now it's massive.

    Fyodor Sidorov, founder of the School of Practical Investing, believes that the trajectory of the ruble will be determined primarily by internal conditions - the decisions of the regulator and the government. And external ones - import restrictions, high oil prices - rule out a sharp drop.

    With the current geopolitical instability, both up and down movement is possible. According to the consensus forecast, in autumn the dollar may rise to 63-65 rubles, the euro - up to 64-65.

    Most experts predict a gradual weakening of the national currency. "In the interests of the budget and subject to the restoration of imports - up to ten percent," warns Ayaz Aliyev, associate professor of sustainable development finance at the Plekhanov Russian University of Economics.

    Thus, the dollar will gradually approach 70 rubles, as required by the treasury. And if the trade balance is restored by 2023 and access to Russian assets is returned to "unfriendly" non-residents, a rise to 90-100 is possible.

    https://ria.ru/20220904/rubl-1813400143.html

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    Post  lancelot Mon Sep 05, 2022 1:10 am

    The rise of Yuan deposits is fine. But Russia should setup alternate ways for Russians to keep accounts or store value.
    For example gold backed accounts based on paper certificates or something like that. Or selling actual gold bars. It is better that Russian citizens get them than London precious metal markets. Russia should also mint more palladium coins.
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    Post  Kiko Thu Sep 08, 2022 9:41 pm

    Moscow Exchange spoke about the work on the launch of trading in the Indian rupee, 09.08.2022.

    The Moscow Exchange is working to launch trading in the rupee, but due to difficulties on the Indian side, the currency will not be brought to the site this year. At the same time, in the near future, the exchange will add two new currencies of the CIS countries to trading - sum and som.

    The Moscow Exchange is working on the launch of trading in the Indian rupee, Daniil Korablev, head of sales to non-credit organizations of the Moscow Exchange, said on the air of the BCS Live program.

    “As far as I know, the work is going on. But there are a lot of obstacles on the Indian side, the Indian Central Bank,” Korablev said. Due to the complexity of the process of organizing trading, the rupee is unlikely to appear on the Moscow Exchange before the end of the year, he said. Earlier, Deputy Finance Minister Alexei Moiseev said that the possibility of using the rupee "is very limited due to the rather tight currency control inside India."

    As for the currencies of the CIS countries, which were previously announced by the site, they will begin in the fall. So, from September 12, the Moscow Exchange launches trading in the Uzbek sum / ruble currency pair, Korablev said. According to him, market participants - corporations, banks and brokers - showed great interest in this tool. From October 10, the exchange also plans to launch trading in the Kyrgyz som, Korablev added.

    At the same time, the platform continues to organize trading in the dirham (the national currency of the United Arab Emirates). “We are working, we are working very actively. The main problem, as in any other currency, is to open a correspondent account,” Korablev explained.

    Since the end of June, the Moscow Exchange has started trading Armenian dram and South African rand. And if the first instrument was in moderate demand among investors, then as of September 8, not a single transaction was made in the rand/dollar currency pair.

    https://www.rbc.ru/finances/08/09/2022/631a1c579a79473ecd120e35

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    Post  Kiko Thu Sep 08, 2022 10:12 pm

    In the medium and long term Russia should establish Russian shares & Russian stock markets as the primordial means for funneling private investments for enhancing domestic production of goods and services.

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    caveat emptor
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    Post  caveat emptor Fri Sep 09, 2022 6:58 pm

    Kiko wrote:In the medium and long term Russia should establish Russian shares & Russian stock markets as the primordial means for funneling private investments for enhancing domestic production of goods and services.
    It already exists with the caveat that it was easier for Russian companies to go, for example to LSE, due to higher liquidity and lower rates on loans.
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    Post  Scorpius Mon Sep 12, 2022 1:16 pm

    On the first of September, 155 new schools built by the beginning of the school year opened their doors in Russia for the first time. Also this year, 9.5 thousand centers of education of digital and humanitarian profiles "Point of Growth", 183 children's technopark "Quantorium" will open their doors. Gyms and playgrounds have been updated in 3360 schools in villages and small towns. In total, 623 new schools are planned to be built in Russia over the next two years.

    Everyone can compare this with the statistics in their own country.

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    Post  Scorpius Mon Sep 12, 2022 1:20 pm

    The Russian Federation plans to build more than 40 vessels to increase exports of products. This was announced by Deputy Prime Minister Victoria Abramchenko at a meeting with deputy Prime Ministers, which was held by Prime Minister Mikhail Mishustin.

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    Post  Scorpius Mon Sep 12, 2022 4:18 pm

    The government will allocate more than 100 billion rubles to increase the stability of the economy, Russian Prime Minister Mikhail Mishustin said.

    The aviation industry will receive 15 billion rubles to expand the production of MS-21 aircraft. 25 billion rubles will be provided to support the air traffic management system;

    ▪ 15 billion rubles will be allocated for the program of preferential leasing of sea vessels. By 2030, it is planned to build and transfer over 300 vessels of various purposes to transport companies;

    ▪ The industrial development fund will be capitalized by more than 8 billion rubles. Separately, 4 billion rubles will be allocated for programs in the field of low- and medium-tonnage chemistry;

    ▪ 2 billion rubles will be allocated for the development of equipment for LNG production;

    ▪ 5.5 billion rubles will be allocated to support investment projects and create new jobs in the Kaliningrad region

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    Post  Firebird Thu Sep 15, 2022 9:57 am

    Scorpius wrote:
    On the first of September, 155 new schools built by the beginning of the school year opened their doors in Russia for the first time. Also this year, 9.5 thousand centers of education of digital and humanitarian profiles "Point of Growth", 183 children's technopark "Quantorium" will open their doors. Gyms and playgrounds have been updated in 3360 schools in villages and small towns. In total, 623 new schools are planned to be built in Russia over the next two years.

    Everyone can compare this with the statistics in their own country.

    My old state school, supposedly the best state school in the town, looks absolutely 3rd world in comparison - 1950s prefab crumbling down and has 1700 pupils when built for 1050.
    So much for the "prosperous West" vs "the gas station with nukes" (words of that cocksucker Bathhouse Barry Obama).

    Evidently substantial changes are afoot in the World.

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    Post  Kiko Fri Sep 16, 2022 12:38 pm

    The Central Bank cut the key rate for the sixth time in a row, 09.16.2022.

    The Central Bank lowered the key rate by 0.5 percentage points to 7.5%.

    The Bank of Russia lowered the key rate from 8% to 7.5%. Against the backdrop of a slowdown in weekly deflation and rising inflationary expectations, the regulator decided to continue easing policy, but reduced its pace compared to previous steps.

    https://www.rbc.ru/finances/16/09/2022/632406e09a79473754bba944

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    Post  ALAMO Fri Sep 16, 2022 12:43 pm

    They are trying to weaken the ruble.
    Desperatly Laughing

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    Post  Scorpius Fri Sep 16, 2022 1:59 pm

    Kiko wrote:The Central Bank cut the key rate for the sixth time in a row, 09.16.2022.

    The Central Bank lowered the key rate by 0.5 percentage points to 7.5%.


    This is the level of December 2021. And lower than on the eve of the start of a Special military operation

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    Post  Scorpius Fri Sep 16, 2022 2:21 pm

    Russian President Vladimir Putin, speaking at an expanded meeting of the SCO summit, said that Russia is ready to transfer 300 thousand tons* of Russian fertilizers accumulated in European ports to developing countries for free. The Russian leader noted that he told UN Secretary General Antonio Gutteris about this in a recent telephone conversation.

    Putin also called on Deputy UN Secretary General Rosemary DiCarlo to demand that the EU lift restrictions on the export of Russian fertilizers to third countries.

    https://rg.ru/2022/09/16/putin-rossiia-gotova-besplatno-peredat-rossijskie-udobreniia-razvivaiushchimsia-stranam.html

    *According to my calculations, this amount is enough to fertilize the soil on an area of about 3.75 million hectares

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    Post  ALAMO Fri Sep 16, 2022 3:18 pm

    Scorpius wrote:Russian President Vladimir Putin, speaking at an expanded meeting of the SCO summit, said that Russia is ready to transfer 300 thousand tons* of Russian fertilizers accumulated in European ports to developing countries for free. The Russian leader noted that he told UN Secretary General Antonio Gutteris about this in a recent telephone conversation.

    Putin also called on Deputy UN Secretary General Rosemary DiCarlo to demand that the EU lift restrictions on the export of Russian fertilizers to third countries.

    https://rg.ru/2022/09/16/putin-rossiia-gotova-besplatno-peredat-rossijskie-udobreniia-razvivaiushchimsia-stranam.html

    *According to my calculations, this amount is enough to fertilize the soil on an area of about 3.75 million hectares

    This is trolling on a master level.
    That fertilizers has been registered by the various agencies and companies under the "sanction" agenda.
    From the Russian perspective, those are lost in same way as the stolen reserves.
    However, those EU smartasses counted that to the balance, and were quite sure it can be used for the season.
    300kT is a lot, whole EU uses about 10 mln tons annually, so that makes approx. 3% of the whole year needs.
    Now if Russkie de facto granted them to the developing countries, and made that officially - it is a huge propaganda blow on the UN battlespace. Those countries are members as well, with full voting rights. 300kT for them is enough to cover half of the needs I guess.

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    Post  GarryB Sat Sep 17, 2022 4:39 am

    Just Putin forcing the EU to show its underhanded greedy hand... they couldn't give a shit about poor countries or world famine... they were just the same during Covid... fighting over vaccines and masks and ventilators to meet their own needs and screw everyone else... these are the people who rule the world at the moment... selfish censored .

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    Post  Kiko Tue Sep 20, 2022 12:30 am

    Bank of Russia: It is planned to lower both the maximum rates on microloans and the total amount of overpayment on such loans, by Roman Markelov , Evgeny Gaiva for Rossiskaya Gazeta. 09.19.2022.

    Regulation of the microfinance market will soon become tougher against the backdrop of an increase in the debt burden of borrowers: it is planned to lower both the maximum rates on microloans and the total amount of overpayment on such loans. Several million borrowers of microfinance organizations (MFIs) should benefit from the changes initiated by the Bank of Russia, the Central Bank calculates.

    Since the end of last year, the State Duma has been considering a bill limiting the maximum rate on microcredits. Ilya Kochetkov, director of the Bank of Russia's microfinance market department, told Rossiyskaya Gazeta that the draft law is now being prepared for the second reading, which will presumably take place in the autumn session. "The preliminary estimated effect of its adoption is that citizens will save more than 5 billion rubles in interest payments in the future," Kochetkov said.

    In the current version, the bill provides that the maximum daily interest rate on microloans will be reduced from 1% to 0.8% per day, the maximum value of the total cost of the loan (TFR) - from 365% to 292% per annum. And the maximum amount of all overpayments on a microloan cannot be more than 130% of the microloan amount (now no more than 150%). "After the adoption of the law, while maintaining current trends, the reduction in interest rates will affect more than 80% of newly concluded microloan agreements," Kochetkov estimated.

    Now microlenders can charge borrowers a maximum rate of 1% per day. This indicator is planned to be reduced to 0.8%.

    These are far from all the steps taken to regulate the microfinance market by the Bank of Russia. So, in October, new risk ratios for loans with a debt load ratio (LL) of more than 50% will come into force, that is, when more than 50% of the borrower's salary is spent on repaying a loan or loan. "In this case, a premium will be applied to risk ratios, this will put increased pressure on the capital of MFOs and ultimately discourage the issuance of such loans," Kochetkov calculates.

    In addition, in 2023, macroprudential limits on loans with PTI (pre-trip inspection) of more than 80% will come into force, which will limit the share of loans to the most indebted citizens. "That is, each company will be able to issue only a limited number of loans to borrowers with a high value of PTI, no more than a certain percentage of the total number of loans issued to it," Kochetkov said.

    "After the adoption of all these measures, most companies in the MFI market will be forced to adjust their business models and make products more profitable for more than 6 million borrowers," Kochetkov admits.

    The bill on limiting the maximum rate on microloans and the level of overpayment was submitted to the State Duma against the backdrop of a noticeable increase in the debt load of borrowers. The trend towards a worsening situation with the debt load is still observed now, as stated in the Bank of Russia.

    "For the first half of 2022, the share of short-term small loans issued at fairly high interest rates (290% and above) increased. More than 80% of all contracts for the second quarter were concluded at a rate ranging from 0.8 to 1% per day", - told "Rossiyskaya Gazeta" in the Bank of Russia.

    The increase in the cost of loans, coupled with other factors, increases the debt burden of borrowers - the share of loan agreements, on which the borrower spends more than 80% of his income, increased from 47% in 2021 to 55% in the first half of 2022, the Central Bank emphasizes. Ultimately, all this affects the growth of overdue debt. Thus, according to the Central Bank, in the second quarter of 2022, the share of overdue microloans over 90 days in the market as a whole increased by 3.2 percentage points (up to 34.6%), more than during the restrictions associated with the coronavirus pandemic.

    At the same time, in general, after a significant decline in the spring by the beginning of summer, the microfinance market entered the recovery stage, which can be judged based on the indicators of microfinance companies (MFCs account for about half of the MFO market). "The volume of loans issued by the IFC in May increased by 6% (compared to the previous month), in June - by 10%, in July - immediately by 27%," the Bank of Russia said.

    Almost hopelessly overdue microcredits are now more than a third

    Tighter regulation of MFIs will help reduce the debt burden of borrowers, which, in turn, may have a positive impact on their payment discipline and reduce the level of delinquency on the balance sheet of MFIs, said Yegor Lopatin, deputy director of the group of ratings of financial institutions of the NKR agency. "At the same time, this may lead to the exit from the market of small and inefficient companies that will not be able to rebuild their business model under the new regulatory conditions," he does not exclude.

    https://rg.ru/2022/09/19/zanimatelnye-sredstva.html


    Last edited by Kiko on Tue Sep 20, 2022 12:52 am; edited 1 time in total

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    Post  caveat emptor Tue Sep 20, 2022 12:41 am

    My understanding was that some consumer groups were fighting to lower daily interest rate to max 0.5%. So, this is not as good as hoped. Growth of microloans was excessive in last 5+ years. Many murky people make a fortune in this "business".
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    Post  Kiko Wed Sep 21, 2022 11:55 pm

    It is critical for the overall Russian economy to have the RCB introduce measures to get rid the soonest possible of speculators in the MOEX. An incremental ban on open sales might be a positive response to market panic & hysterical mood.

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    Post  Kiko Thu Sep 22, 2022 1:12 am

    In my previous post I called on the RCB to get rid of malicious speculators. But the main thing for Russia is to have an overall self-regulatory of the financial market, working with the creation and administration of trading, settlement, deposit and custody registration systems of the main types of assets present in the overall financial market.
    Following a great deal of scandals in the past, the Brazilian experience with the B3 operator is worth having a close look at in this sense.
    In the US, the Securities & Exchange Commission (SEC), is a government agency responsible for regulating the securities' markets and protecting investors.

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    Post  caveat emptor Thu Sep 22, 2022 6:14 am

    Kiko wrote:In the US, the Securities & Exchange Commission (SEC), is a government agency responsible for regulating the securities' markets and protecting investors.
    On paper that SEC's mandate. But, in reality, they've curbed its wings a lot. Many shady things have been going on and SEC didnt do much as a pushback.
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    Post  Kiko Tue Sep 27, 2022 2:12 am

    Very probably IMOEX will soon bounce back since shares got very cheap, and as dividends remain put. On the other hand, it is paramount to decouple its trend from geopolitical hysteria (benefitting speculators).
    The stock market fell to February lows, by Sofia Sheludchenko for Viedomosti. 09.26.2022.
    Geopolitics continues to put pressure on the market.

    The Moscow Exchange index fell below 1900 points for the first time since February 24, falling by 10.56% (1871 points), according to the data of the trading platform at 13:00 Moscow time. The dollar RTS fell by 10.85% to 1017 points. By 14:00, the decline slowed down, the Moscow Exchange index was losing 7.13%, the RTS - 7.35%.

    Among the blue chips, the shares of Surgutneftegaz fell the most - by 17.12%. Papers of Polymetall, receipts of TCS Group, shares of Rosneft and Yandex lost from 11.54 to 13.23%.

    The ruble, on the contrary, is strengthening: the dollar is depreciating to 57.8 rubles / $, the euro - by 37 kopecks. (55.9 rubles / euro), the yuan loses 4 kopecks. and traded at 8 rubles.

    The fever in the stock market began last week, after the news that on September 23-27 referendums will be held on joining the LPR, DPR, Kherson and Zaporozhye regions, and the announcement of partial mobilization. The Moscow Exchange Index collapsed from September 19 to September 23 by 14.2%, the RTS fell by 10.45%. The drop leaders for the week were Polymetall (-32.04%), PIK (-24.1%), Globaltrans (-22.53%), NLMK (-21.79%) and Rusal (-20.99%) %). None of the companies included in the Moscow Exchange index showed an increase in the value of quotations over the week.

    Negative moods are primarily due to uncertainty in connection with geopolitical events, says the head of the information and analytical content department of BCSThe world of investments” Vasily Karpunin. Sales on the Russian market are associated with several factors, says Alexander Dzhioev, an analyst at Alfa Capital Management Company: firstly, a strong ruble reduces the revenue of export-oriented companies, which, coupled with falling oil prices, puts pressure on issuers in the sector. But the dollar has slipped below 58 rubles/$ despite falling commodity prices, Dzhioev continues, probably due to a large overhang of currency sellers who are unwilling to take the risks of holding toxic currencies from unfriendly countries. An additional negative is the news about a possible increase in the tax burden for coal companies, the expert adds. Also, do not forget about the risks of new sanctions, he said.

    The market may be supported by the payment of dividends, analysts interviewed by Vedomosti said . On Friday, September 30, an extraordinary meeting of Gazprom shareholders is expected to discuss interim dividends for the first half of the year. Dividends are now becoming an important growth factor, notes the head of the department of stock market experts at BCS World of Investments. Gazprom's dividends announced for the first half of 2022 will be paid this time, and before the end of the year and in 2023, a return to payments from other large issuers is likely, adds the investment director of Otkritie Management Company» Vitaly Isakov. The recovery of dividend payments and their return to a long-term growth path will mean good investment results for long-term investors regardless of short-term market revaluation, he says, and the risks are offset by the low valuation of the Russian stock market.

    The Russian market's isolation from world stock exchanges can also become a medium-term factor in supporting the Russian market, says Mikhail Vasiliev, chief analyst at Sovcombank : money will continue to be earned and saved in the economy, and there are almost no alternatives to the domestic stock market for domestic investors.

    https://www.vedomosti.ru/investments/articles/2022/09/26/942546-rinok-aktsii-perezhivaet-hudshee

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    Kiko
    Kiko


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    Russian Economy General News: #13 - Page 2 Empty Re: Russian Economy General News: #13

    Post  Kiko Yesterday at 12:58 pm

    Why not reduce Russian income tax on scaled-down dividends to propel the domestic stock market? Along the same line of reasoning, have dividends raised for Gazprom, Sberbank and other large state-controlled open-capital enterprises.


    Last edited by Kiko on Wed Oct 05, 2022 4:08 pm; edited 1 time in total
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    ALAMO


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    Russian Economy General News: #13 - Page 2 Empty Re: Russian Economy General News: #13

    Post  ALAMO Yesterday at 1:13 pm

    This tax is very low, at 9%.
    Hardly believe it will make any difference to reduce it.

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