All news

Press review: CSTO peacekeepers due to exit Kazakhstan and Russia cuts back dollar assets

Top stories from the Russian press on Thursday, January 13th

Nezavisimaya Gazeta: NATO turns down Moscow’s primary demand

The second round of talks on security guarantees did not provide visible results. The second out of three meetings scheduled within the framework of the negotiations between Russia and the West on security took place at NATO headquarters in Brussels. The parties did not agree to mutual proposals, but did not decline to continue dialogue.

The Russian delegation was led by Deputy Foreign Minister Alexander Grushko, Russia’s last permanent representative at NATO, and Deputy Defense Minister Alexander Fomin who has been overseeing the issues of international military cooperation for years. The other side, in addition to NATO Secretary General Jens Stoltenberg, was represented by the 30 permanent representatives of the Western-bloc’s countries, while the American delegation was led by US Deputy Secretary of State Wendy Sherman who participated in the first round of talks in Geneva on Monday.

"In today’s NATO-Russia Council, I reaffirmed the fundamental principles of the international system and of European security: Every country has the sovereign right to choose its own path," she wrote on Twitter. At a briefing following the talks, Sherman said that her NATO allies fully supported this position meaning that they were giving no guarantees to Moscow on non-expansion.

Stoltenberg said that Russia had not yet accepted the proposals to conduct expanded consultations on security issues including the limitations on missiles, saying that it needed more time. US Under Secretary of State for Political Affairs Victoria Nuland reiterated that Russia cannot veto the acceptance of any countries to NATO and yet again threatened Russia with sanctions should it invade Ukraine. However, for the first time ever she admitted that the launch of Nord Stream 2 was being delayed under pressure from Washington. She confirmed that Germany is ready to reject this project completely in case of Russian aggression against Ukraine.

Overall, the meeting in Brussels left the same impression as the Geneva talks - the attempt by the West and Russia to come to an agreement will not produce any significant results. Senior Research Fellow at the Russian Academy of Sciences’ Institute for US and Canadian Studies Vladimir Vasilyev in a conversation with the newspaper was highly skeptical that any long-term agreement on security is possible now, especially after the events in Kazakhstan. "The Russian proposals were made in mid-December. Then the incident took place in Kazakhstan. Apparently, it was unexpected by the Kremlin. Legally binding agreements on security are concluded during a period of stability. When there are tectonic shifts in this sphere, the value of such agreements goes down," the expert said.


Izvestia: CSTO peacekeepers to begin pullout from Kazakhstan on January 13

The withdrawal of CSTO peacekeepers from Kazakhstan will start on January 13, and the Central Asian nation’s President Kassym-Jomart Tokayev praised its mission "a very successful one." On January 12, he left the capital for the first time since the beginning of the disturbances and visited Almaty, the city that was hit the hardest by the riots and looters.

"I came to Almaty to personally assess the scale of the aftermath of the terrorist attack on the country’s largest city. Almaty is my hometown. I was born here, I studied here. Now our objective is to restore the city as quickly as possible. One can say, this is a matter of honor for me as the president and as a citizen of our state," he said.

The Kazakh leader also met with Secretary General of the Collective Security Treaty Organization (CSTO) Stanislav Zas, noting that "the CSTO is now being talked about by the international community. The effectiveness of the organization was displayed rather vividly in this situation."

Kazakh political scientist Marat Shibayev thinks that the president’s visit to Almaty proves that the crisis in the country is over. "The first capital was the hardest hit city, as Almaty bore the brunt of 98% of the cumulative damage from the nationwide insurrection. Therefore, the president had no choice but to visit [the city] and by doing so, he demonstrated that the critical period was over," the expert told Izvestia. He specified that the situation in the country had completely stabilized. "The main forces of the terrorists have been defeated, there were no shootouts yesterday, nor today, so the crisis is over. Now we can manage on our own. Moreover, it is obvious to everyone that if there is a recurrence, it is possible to summon the CSTO again," the political scientist stressed.


Vedomosti: Europe drains half of its gas supplies

Gas supplies in the EU’s underground storage facilities plummeted to 50.9% or 55 bln cubic meters according to data from Gas Infrastructure Europe (GIE) as of January 10. According to Sergey Kapitonov, a gas industry analyst at the Moscow School of Management SKOLKOVO Energy Center, this is the lowest since 2011. On January 12, Gazprom reported that from October 2021 to January 10, 2022, 26.6 bln cubic meters of gas had been pumped from European storage facilities which is half of the volume pumped in 2021 with the rates of gas withdrawal significantly overtaking the pre-COVID levels.

As far as pulling through the heating season goes, the situation does not seem catastrophic Kapitonov thinks. "Even if the withdrawal rises to 1 bln cubic meters per day - and such maximum values are registered in Europe during severe frosts - Europe can stretch out its supplies in the underground storage facilities until mid-March," he estimated. Vasily Tanurkov, Director of corporate ratings group at ACRA, estimated that given the current supplies and withdrawal rates, Europe has enough fuel for 110 days, that is, until May. "In any case, Europe will meet the end of the winter season with a very low level of supplies which will ensure rather high prices in 2022," he added. According to him, the prices will also be influenced by LNG delivery volumes, Gazprom’s sales and the weather.

Alfa Bank Senior Analyst Nikita Blokhin concurs that the volumes of LNG deliveries to Europe are a key factor determining market gas prices. The new capacities of LNG plants in the US will affect the market only in the second half of 2022, Kapitonov notes. Then, according to him, the certification of Nord Stream 2 may occur as well. However, over the next two quarters, gas prices will remain "stably high," the expert concluded.


Kommersant: Armenian-Azerbaijani conflict heats up again

Servicemen are being killed again on the Armenian-Azerbaijani border. On Tuesday, Baku reported the death of its soldier, and overnight on Wednesday, Yerevan reported three servicemen killed by gunfire from automatic weapons. Both sides accuse each other of provocations. Turkey supported Azerbaijan with its diplomats intending to meet with their Armenian colleagues on January 14, making another attempt to restore bilateral relations.

Experts in Yerevan and Baku note that the surge in tensions occurred against the background of the Kazakhstan crisis which the CSTO peacekeeping mission helped settle, with Armenia currently chairing the post-Soviet bloc.

"This is Turkey’s response to the CSTO operation in Kazakhstan. Armenia also participated there which seriously irritated Baku and Ankara," Armenian political scientist Grant Mikaelyan told the newspaper, noting that Azerbaijan and Turkey wanted to tarnish the operation, Armenia’s participation in it and Armenian-Kazakh relations. The newspaper notes that the CSTO mission to Kazakhstan was actively criticized in Turkish and Azerbaijani media outlets while no dissatisfaction has been expressed officially.

Azerbaijani political scientist Ilgar Velizade also interprets the shootout on the border through the prism of the events in Kazakhstan, yet insisting that it was initiated by Armenia. "I think that in light of the events in Kazakhstan, Armenia decided to update the idea of turning to the CSTO. The peacekeeping forces for the first time demonstrated themselves in action. Now they are leaving. Why not use them on the Armenian front, on the border with Azerbaijan," the expert mused, pointing out that the Armenian prime minister is currently chairing the CSTO and was very active in talks on deploying the military contingent to Kazakhstan, therefore he may expect a favor in return.

Armenian Prime Minister Nikol Pashinyan indeed discussed Nagorno-Karabakh in a phone conversation with Russian President Vladimir Putin on Wednesday, yet the Kremlin press service noted that this subject was superseded by "the exchange of opinions on the course of the CSTO peacekeeping operation in Kazakhstan."


Izvestia: Bank of Russia decreases share of US dollar-denominated assets

The total decrease of US dollar assets in the Bank of Russia’s portfolio amounted to $22.9 bln or 19% by the end of the second quarter of 2021, while investments in other currencies grew. According to Managing partner of the analytical agency WMT Consult Ekaterina Kosareva, the diversification of investments is the most reasonable strategy in light of the unstable global economy. "Above all, we are not talking about grievances or reactions to sanctions but about creating an investment portfolio which functions stably under any conditions. Previously, the dollar share was about half of the entire volume of assets and this precisely was what created a dangerous situation of the reserve’s dependency on the rates of the US economy’s development," the expert explained, noting that this trend will continue in the future.

Deputy Director of the Banking Institute of Development Yulia Makarenko told the newspaper that it makes sense to increase the volumes of the currencies of the Asian-Pacific region since the role of its economies will only grow while the dollar will also remain in Russia’s reserve currency assets. According to her, the changes in the asset structure of the Bank of Russia were caused by completely new global economic processes. "Nobody expected the crisis that happened to us rather recently. And all countries worldwide showed what they were capable of. Of course, following this, it would be logical to review one’s attitude to the international economies," the expert explained.

Univer Capital CEO Askhat Sagdiev names several reasons for the decline of dollar assets, including the decreased dollar share in Russian international payments and trade, a drop in Russian investments into US sovereign bonds, as well as the aspiration to increase the share of gold in the reserves.

Finam analyst Alexander Potavin noted that until March 2018, Russia’s Central Bank had 43-48% of assets in US dollars and then started moving them in favor of euro and yuan against the background of US sanctions and the general worsening of relations with Washington over the recent years. In his opinion, this follows the general global trend of other central banks towards decreasing the dollar share in their foreign currency assets. At the same time, the country is not going to remove the greenback from its assets completely. "The necessity of having dollars in the reserves is dictated by the necessity to support the country’s financial stability, the American currency still has a high share in Russia’s international transactions, and additionally, the dollar plays an important part on global financial markets," the expert concluded.

TASS is not responsible for the material quoted in these press reviews