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Russia gets rid of visas to Asia, ruble seeks support — results of EEF’s 2nd day

Although Sberbank CEO Herman Gref said that speculators are putting pressure on the ruble exchange rate, forum participants do not expect a new increase in the key rate

VLADIVOSTOK, September 12. /TASS/. Russia continues to develop cooperation with Asian countries and work is underway to abolish visa requirements for a number of countries, including the possibility of introducing a visa-free regime with China, Deputy Foreign Minister Andrey Rudenko said on the sidelines of the Eastern Economic Forum (EEF).

Although Sberbank CEO Herman Gref said that speculators are putting pressure on the ruble exchange rate, forum participants do not expect a new increase in the key rate.

TASS has collected the main statements by the forum’s participants.

Asia getting closer

Speaking about the development of relations between Russia and China, Russian President Vladimir Putin said that they had reached "a very high level." He also stressed that in the first half of this year, trade turnover with the countries of the Asia-Pacific region "increased by 18.3%."

Meanwhile, Russia is actively working on canceling visas to Asian countries. "We have a rather successful visa regime with quite a few [Asian] countries," said Deputy Foreign Minister of the Russian Federation Andrey Rudenko. "This is a very important task and we will continue to carry it out," the senior diplomat added.

Russia is already preparing intergovernmental agreements on visa-free travel with 11 countries: Malaysia, Bahrain, Oman, Saudi Arabia, the Bahamas, Barbados, Haiti, Zambia, Kuwait, Mexico and Trinidad and Tobago.

Rudenko did not rule out the introduction of a visa-free regime between Russia and China in the future. In turn, the Minister Plenipotentiary of the Chinese Embassy in Russia, Liu Xuesong, said on the sidelines of the EEF that Beijing welcomes the possible introduction of a visa-free regime with Russia, as this will promote tourism and the exchange of business delegations.

Kirill Dmitriev, head of the Russian Direct Investment Fund (RDIF), called the potential of Asia and the Middle East investing in Russian infrastructure projects enormous. According to him, investors "plan to introduce various elements of financial infrastructure that are important for the Russian Federation." "We are talking about creating depositories for shares, payment systems, etc.," he added.

Ruble exchange rate

As Alexander Shokhin, head of the Russian Union of Industrialists and Entrepreneurs, said, businesses will adapt to any exchange rate, even "if it leaps not only by percentages, but by several times." He hopes that the peak of the depreciation has passed and the ruble will be more stable in the medium term.

As Russian President Vladimir Putin noted, there are no insurmountable issues with the ruble exchange rate, yet the country's financial authorities must take a closer look at this issue.

According to Sberbank CEO Herman Gref, profiteers are putting pressure on the ruble exchange rate.

"Today, a very large over-the-counter foreign exchange market developed outside of our authority, with the ruble taking a hit, and over-the-counter trading. We must carefully consider what can be done about this. We have submitted our ideas, but my experience has shown that administrative procedures are ineffective," he said.

Key rate

According to VTB CEO Andrey Kostin, the Bank of Russia will keep the key rate at 12% at the meeting of the board of directors on September 15. He voiced this opinion while talking to journalists on the sidelines of the EEF.

Gref does not expect the key rate to be raised at the next meeting either. However, he believes that a rate cut can be expected within the next six months. "The Bank of Russia has learned to work with this kind of inflationary surge," the head of Sberbank said.

In an interview with the RBC TV channel on the sidelines of the EEF, aide to the President of the Russian Federation Maxim Oreshkin said that the key rate is a balancing tool, "not a basic one," and the decision to change it must be made when other measures have been exhausted.

Introduction of Mir payment cards

The Russian authorities continue work to expand the operating area of Mir payment cards.

"There are intensive discussions on the topic of our cards in Southeast Asia. We are in talks with India, with China, and other countries," Rudenko said.

Currently, Mir cards are accepted in Cuba, Venezuela, Abkhazia, Armenia, Belarus, Vietnam, Kazakhstan, Kyrgyzstan, Tajikistan, South Korea and South Ossetia.

The possibility of launching Mir cards throughout Thailand is also being explored. "This topic is being discussed by central banks," Rudenko said.

Fighting shadow economy

The shadow sector of the Russian economy is shrinking, said Boris Titov, the Russian Presidential Commissioner for the Protection of the Rights of Entrepreneurs. "The reform of control and supervisory measures, reduction of tax burden, self-employment regime, etc. All this resulted in bringing a large number of business entities in different industries out of the shadows. Therefore, there are positive trends in this area," Titov explained.

As Economic Development Minister Maxim Reshetnikov noted, the number of business inspections by regulatory authorities in 2023 decreased by 15% compared to 2022. At the same time, the number of incidents at enterprises has not increased, and "the load on business has decreased significantly."

'Phantom' of nationalization

As Sberbank CEO Herman Gerf noted, a trend towards nationalization is emerging in Russia. According to him, this fosters an environment where "the economy becomes unattractive for investment."

Responding to a question from the moderator of the EEF plenary session, Putin did not agree that the role of the state in the Russian economy is too large. "Yes, we have large companies, especially in the energy sector, but private structures are developing rapidly. We support them," the head of state said. He also emphasized that government agencies that receive nationalized assets dispose of them in accordance with legal procedures.

GDP growth forecast

Russia's GDP growth by the end of 2023 may range from 2% to 3%. "It’s obvious that it’s over 2%, but between 2% and 3%; it’s hard to predict right now," Gref voiced his assessment.

According to the Bank of Russia, GDP growth in Russia by the end of the year will likely be in the upper limit of the forecast of 1.5-2.5%. The Finance Ministry also expects the national economy to grow by at least 2% by year’s end.

Oreshkin noted that the budget situation is stable, the deficit to the expected GDP of the current year is about 1.5% against the expected 2%. In 2024, under certain conditions, the federal budget may turn out to be in surplus, he said.