The Russian ruble’s value has been “stable” at about 83/dollar for the past week; Russia’s ability to import is drastically reduced and its fossil fuel exports have continued, but shifted east. OilPrice.com reported today that all Russian oil cargoes for May delivery to China are being paid for in yuan, and like India’s increased imports from Russia, are coming at a discount of $30-35 from the Brent Crude price of about $110/barrel. Russian exporters are not requiring letters of credit from Chinese purchasers.
India and Russia thus far have not agreed on the intended rupee/ruble trade outside of weapons. But a New Delhi newspaper, The Tribune, carried an editorial April 4, “India-Russia Trade Plan,” saying the course of action would be determined by India’s national interest. It reports that Indian Finance Minister Nirmala Sitharaman has defended the discounted oil purchases from Russia as beneficial for India’s population and views the rupee-ruble trade plan the same way, and as mutually beneficial for the two countries. “A top U.S. official,” the editorialist writes, referring to State Department spokesman Ned Price, insists that Russia’s cooperation with China means that it would not defend India against a China attack, “firmed up rather than weakened the Indian outlook.” A payment mechanism is being worked out. “[Indian] manufacturers are already sensing an opportunity to ramp up exports [to Russia], particularly of agricultural machinery, medicines,” and so forth.
Europe’s purchases of Russian oil were cut in half in all of March, to 738,000 metric tons, as many purchasing companies “self-sanctioned.” Now the Anglosphere—U.K., Canada, Australia, and United States—will demand from Europe a full embargo, setting off the economic collapse and job loss in Europe that Helga Zepp-LaRouche and many other German leading figures have warned of.
The Bank of Russian central bank resumed purchasing gold in the past week, at an implied much higher value equivalent to about 68 rubles/dollar, and apparently sales from Russian gold miners/producers to the bank are occurring, as reported by at least one of these miners. The State Statistics Office estimates the current (annualized) inflation rate at 15.6%, but as having fallen by about 1.5% (annualized) over the past two weeks. Vneshnekonombank Group published estimates for 2022—which may be no better than Wall Street bank forecasts—that inflation would be 19%, real wages would fall 12%, and unemployment would be 6% at the end of the year.
Productive credit appears to be a huge problem. As firms close due to disinvestment from abroad or because their imported inputs are blocked, etc., severe shortages of many more or less essential products are appearing, which then may be filled—as in the case of paper—by Russians taking over or starting up, but they charge much higher prices in part from their own costs of borrowing to operate. The central bank on March 31 announced a series of “additional measures to support credit institutions,” of which the main one seems to be increasing the bank’s discounting of loans to SMEs by five times, up to 50 million rubles (ca. $600,000) per SME. But the interest rate on these, presumably in the 20%-plus range.
The CEO of JPMorgan Chase bank, one of those “disinvestors,” who cannot cash in due to Russian regulations of Feb. 28, estimated today that the bank is losing $1 billion in Russia.
