The Central Bank of Russia has suspended currency interventions in support of the ruble, the head of the regulator, Elvira Nabiullina, announced on Monday. According to Nabiullina, the regulator is unable to carry them out because of Russia’s assets freeze by US and EU member states.

“Due to restrictions on the use of foreign exchange reserves in dollars and euros, we did not carry out any interventions today. The government has announced a decision to introduce the mandatory sale of 80% of export earnings. This measure will ensure an even supply of foreign currency on the domestic fx market to meet the needs of importers and citizens. At the same time we are taking a number of steps to limit export of capital by non-residents,” said Nabiullina.

The Office of Foreign Assets Control, the US Treasury Department division responsible for sanctions enforcement, has prohibited US residents from engaging in any transactions with the Bank of Russia, the Russian Finance Ministry, and the Sovereign Wealth Fund.

“The Russia-related Sovereign Transactions Directive will disrupt Russia’s attempts to prop up its rapidly depreciating currency by restricting global supplies of the ruble and access to reserves that Russia may try to exchange to support the ruble,” reads the statement published on the Treasury’s website on Monday.

To support the currency, Russia’s Ministry of Finance has ordered businesses that trade abroad to sell 80% of their foreign currency earnings and convert them to rubles.

Sanctions over the Ukraine conflict have sent the Russian currency plummeting to historic lows.

The ruble has lost about 30% of its value since the last trading day on Friday. On Monday, the Russian currency plummeted to as low as 109 rubles per dollar and to 122 rubles per euro before recovering some of the losses. The exchange rate for Tuesday, March 1 has been set at 93.5 rubles per dollar and 104.4 rubles per euro. 

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Global chipmakers have begun suspending semiconductor chip sales to Russia in the wake of Western sanctions introduced against Moscow following the launch of a military operation in Ukraine.

Last week, the US announced a package of measures aiming to undermine Russia’s military capability, which include a ban on chip sales to the country. According to Washington, the ban aims to stop Russia from receiving technology for military purposes or dual-use chips that could be used for both civilian and military equipment. This means that sales of most consumer-focused chips may not be targeted.

However, analysts say chipmakers may temporarily halt all chip deliveries while they assess which of their products fall under the new ban. Also, the US Department of Commerce has added 49 Russian companies to its Entity List, and these companies are now ineligible to purchase any type of chips made in the US or using American technology.

“With these export controls, we, together with our allies and partners, are technologically isolating Russia and degrading its military capabilities. Russia’s access to cutting-edge US and partner country technology will halt. Its defense industrial base and military and intelligence services will not be able to acquire most Western-made products,” Thea D. Rozman Kendler, the assistant secretary for export administration at the US Department of Commerce, said in a statement last Thursday.

In response to Washington’s announcement, the world’s largest manufacturer of chips, Taiwan-based TSMC, said on Friday it is fully committed to complying with new export control rules, after Taiwan’s government pledged to support international sanctions against Russia.

“TSMC complies with all applicable laws and regulations and is fully committed to complying with the new export control rules announced,” the company said in a statement.

Media reports state that TSMC has already suspended all chip sales to Russia and to third parties known to supply products to Russia while it analyses the new exports rules to make sure it fully complies. The largest US processor manufacturers, Intel and AMD, have also halted sales to Russia, RBC reported citing sources in the IT market.

Russian media outlets state that the suspensions of sales have been confirmed by the Russian Electronics Developers and Manufacturers Association (EDMA).

Some industry analysts say Russia could be vulnerable to the export ban because it doesn’t make the high-end chips needed for advanced computing, which are mostly made in Taiwan, South Korea, the United States, Europe, and Japan. The Semiconductor Industry Association (SIA), a trade group representing major brands such as Intel, AMD, IBM, Qualcomm, and Marvell, said it is “fully committed to complying with the new export control rules announced in response to the deeply disturbing events unfolding in Ukraine.”

However, according to data provided by the group, the impact of the chip export ban may not be what the West is expecting. The SIA stated that “Russia is not a significant direct consumer of semiconductors, accounting for less than 0.1% of global chip purchases.”

Meanwhile, in response to the chip export ban, Belarusian President Aleksander Lukashenko on Sunday offered to buy the necessary parts in Belarus, stating that the situation is “pushing for the closest cooperation.”

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Germany’s finance minister said on Friday that EU sanctions over Russia’s military operation in Ukraine had led to Russian banks being nearly completely blocked in his country. The only transactions still allowed were those by German companies to pay for Russian gas, Christian Lindner said.

“There is already a complete blockade of Russian banks. Thus, business traffic with Russian enterprises is practically blocked. In some cases, transactions are still possible. For example, to pay for gas supplies, so that German companies can make transfers to their subsidiaries in Russia,” Lindner said.

In a video posted on the German Finance Ministry Twitter account on Friday, Lindner added that Germany had secured energy supplies and was prepared for the possible consequences of the EU sanctions against Russia. He admitted, however, that the government is currently unsure what the exact consequences of the sanctions would be, and could result in even higher inflation, he said.

According to Lindner, the EU could impose further sanctions on Russia but the bloc had to make sure they impact the Russian economy specifically. The German government has been reported as saying on Friday that no sanctions against Russia’s energy sector were planned, as such measures could hurt Berlin more than Moscow.

READ MORE: Russian military attack on Ukraine: How we got there

The EU introduced sweeping sanctions against Russia earlier this week, targeting the country’s banking sector, as well as technology and airline industries. Europe’s energy sector faces some uncertainty in the wake of the Ukraine crisis as 40% of the bloc’s natural gas supplies come from Russia.

Earlier this week, Berlin suspended the Nord Stream 2 project – a pipeline that was intended to increase Russian gas deliveries to the EU. Germany’s Foreign Affairs Committee said on Thursday that new gas contracts with Russia were inconceivable.

Gas prices in Europe reacted to the developments by climbing as high as $1,500 per thousand cubic meters on Thursday. The German Energy Ministry said on Friday that it had begun to secure alternative sources of coal imports, as half of its coal supplies come from Russia.

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Article source: https://www.rt.com/business/550619-germany-blocks-russian-banks/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

European prices for liquefied natural gas (LNG) exceeded $1,000 per 1,000 cubic meters on Wednesday, marking a daily growth of more than 7%, according to Intercontinental Exchange’s London clearing house.

The March futures on the title transfer facility hub in the Netherlands traded at $1,004.7 per 1,000 cubic meters, marking a 7.8% increase from Tuesday, when the gas was trading at $932.3.

There was a major hike in gas prices in the region last spring, when futures were hovering at around $300 per 1,000 cubic meters. The spot price had soared to $600 by the end of the summer, then to $1,000 in October, and hit an all-time high of $2,190 in December.

The dramatic surge was attributed to a wide range of factors, including an increased demand for LNG in Asia, the limited supply from major exporters, and under-filled European storage facilities after last year’s hot summer and harsh winter.

READ MORE: Russia-Ukraine standoff could hurt US economy – JPMorgan

The situation was exacerbated in late 2021, when the US authorities first alleged that Moscow was likely to launch a military assault on Ukraine and threatened to impose new sanctions on Russia, the EU’s major LNG supplier. Those speculations have been repeated since then by Western media outlets as well as by European officials, sending the prices of commodities, including gas, skyrocketing.
Prices started cooling in December, with gas trading at trading at under $1000 per 1,000 cubic meters on the Dutch futures market, a European benchmark.

The latest surge comes a day after Germany suspended its certification of the Nord Stream 2 pipeline, putting the energy project with Russia on hold indefinitely. The move was among the penalties imposed on Moscow following President Vladimir Putin’s decision to recognize the independent status of the breakaway republics of Donetsk and Lugansk in eastern Ukraine.

READ MORE: German minister explains Nord Stream 2 regrets

The Gazprom-led project is aimed at boosting Russia’s capacity to deliver LNG direct to Germany, circumventing the land routes that pass through countries such as Ukraine.

On Wednesday, European Commission Executive Vice-President Margrethe Vestager said Germany’s decision to halt the turning-on of the controversial pipeline would not affect EU gas prices.

“There is no gas in the Nord Stream 2 pipeline. What has been stopped is the approval … it needs in order to get into operation, which means stopping the approval process can have no effect on gas prices,” Vestager told a news conference. “We stand fully by the German authorities,” she said.

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A fire last week on a cargo ship in the North Atlantic destroyed over $400-million-worth of luxury and commercial vehicles, according to a risk modeling firm.

The Russell Group said the total dollar value of goods on the ship was $438 million, of which an estimated $401 million comprised cars and goods transporters.

German media outlets have quoted an internal email from Volkswagen US, which stated that the ship had been carrying 3,965 VW, Porsche, Audi, and Lamborghini-badged vehicles. Porsche confirmed that 1,100 of its cars had been on board, and the fire is expected to generate at least $155 million in expected losses for Volkswagen, the Russell Group said.

“These figures showed once again the precariousness of global supply chains. The incident comes at a bad time for global carmakers, which are in the middle of a supply chain crisis sourcing semiconductors, resulting in more delays for new cars,” said Suki Basi, the risk modeling firm’s managing director.

READ MORE: Ship carrying thousands of Porsches catches fire at sea

The 650ft-long Felicity Ace caught fire off the coast of Portugal’s Azores Islands last Wednesday as it voyaged from Germany to the US. The Portuguese Navy safely evacuated all 22 crew members.

It has taken a week to extinguish the blaze, with the lithium-ion batteries used in electric cars being blamed for making it difficult to put out. The navy said on Tuesday that there were now no “visible fire outbreaks” on the ship, but “cooling operations” were still underway.

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Article source: https://www.rt.com/business/550363-cars-400m-destroyed-fire/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Russia’s wealthiest have lost $32 billion in 2022 with losses projected to increase as the crisis in neighboring Ukraine continues to escalate, with the US and her Western allies mulling new rounds of anti-Russian sanctions.

According to the Bloomberg Billionaires Index, a list of the world’s 500 richest people, Gennady Timchenko, who owns stakes in energy companies as well as other businesses, headed the list of wealthy Russians who have seen their fortunes decline. The billionaire, who derives the bulk of his wealth from a stake in a major Russian gas producer Novatek, has reportedly lost $6.47 billion since the beginning of the year. His fortune currently stands at around $16 billion.

Another Novatek shareholder, Leonid Mikhelson, saw his net worth decline by $6.2 billion in 2022 to $26.2 billion, while Lukoil Chairman Vagit Alekperov’s fortune dropped around $3.5 billion in the same period to $19.3 billion, as the energy company’s stock slid almost 17%.

READ MORE: Ruble rumbles, Russian market tumbles as Moscow recognizes Donbass

The net worth of the country’s 23 billionaires currently stands at $343 billion, according to the wealth list, down from $375 billion at year-end.

Russian stock markets slumped this week after President Vladimir Putin recognized the independent status of the breakaway republics of Donetsk and Lugansk in eastern Ukraine.

The US announced the first round of fresh anti-Russian sanctions, targeting “Russia’s elite and family members,” and are supposed to “cut off Russia’s government from Western financing” by putting restrictions on investing into its sovereign debt.

At the same time, Germany suspended Nord Stream 2 pipeline certification, puting the energy project with Russia on hold indefinitely, while the UK imposed sanctions on five of the country’s banks and three of its wealthiest individuals, including Timchenko.

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Article source: https://www.rt.com/business/550331-russia-richest-fortune-losses-ukraine/?utm_source=rss&utm_medium=rss&utm_campaign=RSS