By Emre G├╝rkan Abay
Russia Letter

Russia letter, week beginning Feb. 15

Foreign borrowing

From privatization to cutting the government budget by 10 percent, there have been many different ideas proposed in Russia to cushion the effects of the economic crisis. The final idea, which Russian officials proposed last week, is foreign borrowing. Russia’s latest foreign borrowing took place in 2013, when the government issued bonds worth up to 7 billion euros. 

According to the statement from Russia’s Ministry of Finance, the country applied to 25 foreign banks to issue bonds. 

However, due to financial restrictions through the imposition of sanctions on Russia’s financial institutions, it is yet to be revealed the extent of interest for this proposal. 

Possible sale of Credit Europe Bank

A topic that has gathered a great deal of interest in Turkish markets was in the potential sale of Russia’s largest bank with Turkish capital - Credit Europe Bank. 

The bank has operated in Russia since 1994 and is owned by well-known Turkish businessman Husnu Ozyegin. 

However, Ozyegin’s Fiba Holding released a statement refuting claims of an upcoming sale for now. 

The fate of the bank will be closely monitored in the near future by other Turkish companies currently operating in Russia. 

Decrease in real income of Russians

The Russian Ministry for Economic Development’s announcement last week on the real income of Russians is another development reflecting a downward trend for the first time.

According to estimates of the Ministry for Economic Development, the real income of Russian citizens fell by 9.5 percent last year compared to 2014. Russian Minister of Labor and Social Securities, Maxim Topilin, noted that this drop has never been seen before during previous crises that Russia faced. 

Russia’s industrial production figures 

Finally, the Russian markets will be following the annual industrial production figures that will be announced Monday. Market experts are expecting a decrease of around 3.5 percent.


16 Feb,2016