10.11.2017 — Russian Central Bank Lowered Key Rate to 8.25%
On 27 October the Board of Directors of the Central Bank decided to lower the key rate from 8,5% to 8.25% per annum. The primary reason for the reduction is the stable deflation at a rate of 4%. The respective information letter of the Central Bank was published on 30 October – from this day it shall be applied for the calculation of late payment interest, statutory interest in bankruptcy, and for determining the maximum limit for the reduction of contractual penalties.
The Bank of Russia lowered the key rate by 25 points, and currently it amounts to 8,25% per annum (please see the Central Bank’s notice as of 30 October 2017). This is the fifth time the Central Bank lowers the key rate since the beginning of the year. The decision to lower the key rate is determined by the fact that the inflation level is lower than expected, therefore the Bank of Russia decided to progressively move from stringent monetary policy to moderate monetary policy.
The Central Bank noted that it may gradually reduce the key rate further at the next board meetings. The next meeting of the Board of Directors of the Central Bank where this issue will be considered is scheduled for 15 December 2017.
09.11.2017 — New US Sanctions Against Russia
On 27 October the US Department of State published the list of Russian companies and institutions of defense industry complex and intelligence sector, cooperation with which may result in the imposition of US sanctions.
The list of sanctioned companies and institutions includes intelligence agencies (the Federal Security Department, the Foreign Operations Directorate, the Main Intelligence Directorate) and 39 companies of defense industry (in particular, Rosoboronexport, Izhmash, Kalashnikov, Rostec, Russian Aircraft Corporation MiG, Sukhoi, Tupolev). Most of the companies have already been sanctioned earlier.
According to the new document the US President is entitled to introduce indirect sanctions against the US nationals and companies, as well as nationals and companies from other countries that consummate significant transactions with Russian companies and institutions from the list.
The new sanctions against Russia are effective from 28 November 2017.
06.11.2017 — Russia Rises 5 Places and Moves Up To 35th Position In Doing Business 2018
According to the rating Doing Business 2018 recently published by the World Bank, Russia moved up from 40th position to 35th position among 190 countries. The experts acknowledged such traditional strengths as the ease of registering property (9th position) and starting a business (registration of a legal entity) (26th position). Russia also has major improvements in trading across borders due to the simplification of the customs procedures (moved up from 140th position to 100th position), and in getting electricity (Russia ranked top-10 in this indicator). At that the key weaknesses are dealing with construction permits (115th position) and paying taxes (52th position).
The three leaders according to the ease of doing business index are New Zealand (1th position), Singapore (2th position) and Denmark (3th position). Russia ranked 35th and managed to be in advance of all the Euroasian Economic Community member states, including Kazakhstan (36th position), Belarus (38th position), and BRICS countries – China (78th position), India (100th position), Brazil (125th position).
The improvement of Russia’s position in the rating is explained by its achievements in implementing reforms aimed at creation of a better investment climate, among which the experts emphasized:
- greater access to credit due to the improvement of the register on the notices on pledge of movables;
- reduction of term of processing documents for the state registration of the transfer of title;
- simplification of the procedure for payment of customs duties due to their centralized filing in an electronic system.
Meanwhile the experts admit that for a long time the traditional shortcomings of doing business in Russia are the complicated procedure for dealing with construction permits, namely in Russia it takes twice as much time to obtain a construction permit than on the average in the world (Russia is still ranked 115th in this indicator) and the complex and time consuming procedure of paying taxes (Russia descended from 45th position to 52th position).