The G7 finance ministers announced this week that they are ready to impose economic and financial sanctions on Russia, which will “have a huge and direct impact on the Russian economy.” influence”. Faced with the pressure of sanctions, Russian Finance Minister Siluanov said on the 16th that Russia has sufficient preparations for this, and the West will also pay the economic price for sanctions against Russia.
Do a compression test
Russia Today TV quoted Youluanov as saying that the recently discussed sanctions against Russia may cause volatility in the Russian financial market, but overall “not fatal”. Russia has formulated plans to deal with new sanctions, while sufficient budget and Gold foreign exchange reserves and low public debt levels also provide Russia with a “financial shield”.
In response to rumors of sanctions on Russia being disconnected from the system, Sillunov said that even if Russia was disconnected, it would have the ability to transmit transaction information through other channels. According to the latest news, ‘Russia’s sanctions will also affect the West.
The website of Russia’s Interfax news agency reported that Russia has conducted a stress test on the stability of its fiscal budget in combination with possible sanctions from the West. After evaluation, the reserve system of the National Welfare Fund established by Russia will play a positive role, and the Russian budget will be protected to a certain extent. At the same time, Russia will also develop new sales markets and sources of supply to maintain its own economy.
According to the latest data released by the Russian Ministry of Finance, as of February 1, 2022, the size of Russia’s national welfare fund is about 13.6 trillion rubles, which is expected to account for 10.2% of the estimated GDP in 2022. According to the official website of the Russian Central Bank, as of February 4, 2022, Russia’s foreign exchange reserves were about 634.9 billion US dollars.
Russia’s ability to respond to sanctions increases
The US-based Institute of International Finance said that if a conflict breaks out between Russia and Ukraine, the West has three options for “nuclear bomb-level” sanctions against Russia: one is to restrict Russia’s energy exports, including the suspension of the operation of the “North Stream 2” natural gas project; the second is to ban Russia. Banks obtain US dollar financing; the third is to prohibit the export of high-tech products to Russia. Some analysts say that no matter which version of the sanctions will lead to the “common destruction of Russia and the Western economy”.
The Institute of International Finance estimates that the future sanctions imposed by the United States and Europe on Russia will have limited effect. Although the sanctions will have a certain impact on the profitability and asset structure of some companies at the micro level, they will not have a significant impact on GDP or the ruble test. .
The outside world is optimistic about Russia’s ability to resist Western sanctions. According to the 14th Daily of the Russian Business Consulting Network, the Vienna Institute for International Economics recently released a report saying that since 2014, Russia has established a macroeconomic system that is immune to Western sanctions. The report believes that maintaining a low level of foreign debt, maintaining a surplus in the fiscal budget, sufficient gold and foreign exchange reserves, and adopting a conservative monetary policy, financial de-dollarization policy and import substitution policy in key industries enable Russia to impose sanctions and stabilize the economy.
Moody’s, an international rating agency, previously analyzed that Russia’s ability to deal with sanctions has increased in recent years. The accumulation of fiscal and foreign exchange reserves, coupled with a more flexible exchange rate regime and more conservative fiscal policy, will help offset most of the immediate impact of the new sanctions.
According to the 17th Daily on the website of the Russian “Pravda”, Russia had nearly $635 billion in foreign exchange reserves at the beginning of February. Over the past seven years, Russia and the central bank have reduced their reliance on the dollar, withdrawing assets from the U.S. and selling U.S. bond holdings. Meanwhile, Russia is restructuring its international assets to increase its holdings of other currencies and yellow & International rating agencies have previously said that Russia’s financial reserves will allow the country to deal with the negative impact of sanctions.
Russia’s “trump card”
Although Russia’s economy is small (about 1.8% of global GDP), it occupies an important position in global production and supply chains.
According to a report by the Russian “Expert” website on the 17th, Russia provides 6% of the world’s aluminum production, 10% of copper and more than 30% of titanium. A large number of aircraft factories in the United States and the European Union will stop production if they leave the Russian raw material supply. Sanctions on Rusal in 2018 led to a sharp rise in U.S. metal raw material market prices. In semiconductors, Russia has a 40 percent share of the global supply of buttons, one of the most important materials in the production of microcircuits. In addition, Russia has industrial diamonds and many other products. Therefore, Western sanctions are a double-edged sword.
This is far from the total dependence of the Western economy on the Russian economy. Russia’s finance minister said that if Europe rejects Russia’s energy resources, Russia will redirect them to other markets. The German news agency said on the 17th that according to European Commission President Ursula von der Leyen, Russia has a “clear risk” to the European Union’s natural gas supply. The European Commission has held talks with LNG exporters such as the United States, Qatar and Egypt in recent months to increase their supply. ‘
In addition, the EU is also negotiating with Japan, South Korea and other LNG importing countries to try to hand over orders to the EU. However, the EU still relies heavily on Russian gas supplies. The EU currently meets 24% of its overall energy needs with natural gas, of which 90% is imported, with about 50% of the imports coming from Gazprom
“Consulting firm urges Apple shareholders to reject Cook’s nearly $100 million compensation package.” According to a report by the Financial Times on the 16th, the U.S. shareholder service company claimed to be “seriously concerned” about Apple’s chief executive (CEO) Cook’s $99 million in 2021 compensation plan.
The New York Post said on the 16th that Cook’s high compensation includes about $82 million in stock awards, $12 million in cash awards and $3 million in wages. On top of that, there were more than $700,000 in private jet travel and up to $630,000 in private security.
Reuters reported on the 16th that Cook’s income is equivalent to 1,400 of the average income of Apple employees. Over the past 10 years, Cook has led Apple to become the world’s first $3 trillion company. Earlier this month, Apple said profit for the fourth quarter of fiscal 2021 hit $34.6 billion, up 20% from a year earlier.
Fortune previously reported that the earnings of chief executives of major companies rose 16% during the pandemic, while the average worker’s pay rose just 1.8%. The report on the distribution of wealth in the United States shows that the total net worth of the top 1% of American households has exceeded the total net worth of middle-income households; The average salary of the constituent company FFF is 299 times the average salary of the average worker. The average executive compensation was $15.5 million.
According to data released by Platts, the spot price of North Sea Brent crude oil in the UK market reached US$100.8 per barrel on the 16th, which is the first time that international oil prices have broken the US$100 mark since 2014. On the 17th, the spot price of North Sea Brent crude oil fell significantly, once falling to $93 a barrel. !
Germany’s Handelsblatt reported on the 17th that the recent rise in international oil prices was mainly because the demand for crude oil exceeded expectations. The crisis at the Ukraine-Russia border and uncertainty over negotiations over the Iran nuclear deal also contributed to higher oil prices, according to German banking expert Fogel. Experts expect oil prices to rise above the $100 mark again soon.
Driscoll, director of the energy services company, predicted in an interview with US media this week that due to the prominent supply contradiction of crude oil, international oil prices are expected to exceed $120 a barrel this year, or even $150 a barrel.
The Ministry of Agriculture, Forestry, Livestock and Food of the Ministry of Planning and Finance of South Korea announced on the 17th that the cost of eating out has been rising. Help consumers understand the prices of dishes in various restaurant chains.
According to Yonhap News Agency’s report on the 17th, the 12 categories of catering industries with publicized prices this time mainly include porridge, gimbap, hamburger, fried chicken, fried rice cakes, coffee, fried noodles, pork belly, pork chops, pork ribs soup and beef offal soup. The price announcement object is not all restaurants, mainly the main dishes with the highest performance among the chain brands. For example, in fried chicken chain stores, the government will select the top 10 chain brands and announce the prices of 3 to 4 main products such as original fried chicken and seasoned fried chicken. The price information of related products can be confirmed weekly through the website of the Korea Agriculture and Fisheries Food Distribution Corporation and the Agricultural Products Distribution Information website. However, there are doubts that companies have disclosed the prices of various dishes to the public, and the government’s publicity of prices in the catering industry may not be effective.
Relevant persons in the Korean catering industry said that in the context of rising global prices of raw and auxiliary materials, the price increase in the catering industry is expected. Statistics Korea said that in January this year, the price index for eating out in South Korea rose by 5.5% year-on-year, the largest increase since February 2009. South Korea’s consumer price index rose 3.6% year-on-year in January this year, an increase of more than 3% for the fourth consecutive month. The prices of agricultural and sideline products rose by 6.3%, of which pork, imported beef, domestic beef, eggs and other livestock products rose by 11.5%, mainly due to increased demand, rising energy prices and supply chain blockages