BANKS BAG DOLLARS

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BANKS BAG DOLLARS

Moskovsky Komsomolets, December 29, 2000, p. 1

So the exchange rate has slipped below 28 rubles to the dollar. Why has the ruble dipped? Firstly, commercial banks do not want to let their rubles gather dust in correspondent accounts of the Central Bank (106 billion rubles). Secondly, banks are using the dollar as a refuge because they are afraid of oil prices falling. Moreover, the delay in passing the budget made bankers nervous.

What should we expect from the hard currency market? It is most unlikely that the ruble will continue to fall. The Central Bank’s dealers can buy up all these dollars and do away with the ruble shortage by January 15.

However, Andrei Lusnikov, an analyst with the Finmarket information agency, thinks the situation in the first quarter of 2001 will not be as stable as in 2000.

Reasons? Energy prices, foreign debt, and differences with the Paris Club. That’s why it is possible that the ruble exchange rate will fall faster than it has in the fourth quarter of 2000.

MAIN INTELLIGENCE DEPARTMENT CANNOT HEAR ITS AGENTS

Izvestia, December 29, 2000, p. 2

A Cyclone-3 rocket with six satellites was launched from the Plesetsk space center on December 27. At first everything was fine, but due to a malfunction of the third stage the rocket failed to put the satellites in orbit.

These three satellites of the Gonets system, made by the Krasnoyarsk Applied Mechanics Enterprise, were to become part of Russia’s low-orbit communications system. At present there are six such satellites in orbit. In total, the system should consist of 45 satellites. Three Strela-3 satellites made by the same enterprise were to provide communications between the Main Intelligence Department and its foreign agents.

A SUPERSONIC INVASION

Izvestia, December 29, 2000, p. 2

Rosoboronexport (Russian Defense Exports) has signed a contract with Hindustan Aeronautics Limited for licensed assembly of Su-30MKI fighters. The value of this contract is about $3.3 billion. This is the largest single contract in the history of Russian arms sales.

The Indian delegation was satisfied with the results of talks in Irkutsk, where the aircraft building plant which produces Su fighters is located. From now on Su-30 MKI fighters will be assembled at an aircraft building plant in Nasik.

Given that 85% of the Indian Air Force consists of Russian military hardware, it is clear why the Irkutsk contract has been signed so rapidly. It took less than a year to prepare the agreement.

PRESIDENT WARNS CHUBAIS

Rossiyskaya Gazeta, December 29, 2000, p. 1

The results of the State Council presidium meeting chaired by the Russian President on December 26 were sensational. The president issued instructions to create a new working group to consider proposals from the regions on restructuring RJES, the electricity monopoly. The group is headed by Governor Victor Kress of the Tomsk region, rather than a minister. It should be noted that Kress is the head of the Siberian Agreement regional association, and a member of the RJES board of directors.

Deputy Prime Minister Victor Khristenko said that the working group headed by Kress must complete its task by March 1. After that the Cabinet will pass a program for restructuring the Russian electricity sector in 2001-02. Kress noted that the working group will include representatives of the regions, the Presidential Administration, and the Cabinet. The group’s proposals will be discussed by the State Council.

Evidently, the results of the State Council meeting are an indirect warning from the president to Anatoly Chubais and Herman Gref, who are trying to promote their own restructuring plan for RJES.

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