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Press review: Kremlin, West point fingers over Nord Stream and Russia, Taliban reach deal

Top stories from the Russian press on Thursday, September 29th

Media: Russia, West looking for someone to blame for sabotage incident in Baltic Sea

Russia has requested an emergency meeting of the United Nations Security Council over Nord Stream gas pipeline blasts. The Kremlin made it clear that the United States and Poland could have been interested in disabling the offshore pipelines, while Russia and Germany would only face losses from the incident. However, Europe suspects Russia of causing damage to the gas pipelines. The parties are unlikely to launch an investigation anytime soon, Kommersant writes.

Judging by the first data, the explosions caused significant damage and now, large segments of the pipelines may require examination, Deputy Head of the Economic Department at the Institute for Energy and Finance Sergey Kodratiev emphasized. According to him, repairs may cost between 200 mln and 600-700 mln euros.

Experts interviewed by Nezavisimaya Gazeta believe that in the current situation, the full suspension of Russian gas supplies to the European Union is a matter of the near future. "Given the current state of relations between Russia and Ukraine, backed by its European allies, the suspension of gas transit has been a matter of time for a while now. The Russian government must have embraced a future budget deficit as it believes that putting pressure on the European economy in a bid to ease the pressure of sanctions is more important at the moment than making money from gas exports," Finam analyst Sergey Kaufman noted.

TeleTrade analyst Alexey Fyodorov points out that Europe will face a difficult choice: "Either to launch Russian gas supplies through the only remaining thread of Nord Stream 2 and save its economy from the toughest structural crisis, or abandon the use of Nord Stream 2, get locked into long-term dependency on US liquified natural gas and go through a de-industrialization."


Izvestia: EU cooks up eighth package of sanctions against Russia

The European Commission has announced its new draft package of measures against Moscow, which particularly includes the possibility of capping Russian oil prices. However, experts are convinced that European nations will have to bargain with each other based on their different economic interests, Izvestia writes.

Apart from the oil price cap, Brussels also plans to impose restrictions on the exports of EU technologies that may be used in the defense industry, including aviation equipment, electronic components and special chemical substances.

First Deputy Chairman of the State Duma Energy Committee Igor Ananskikh believes that there won’t be global issues in redirecting the export of oil products. "The thing to understand is that there will be a major recession. Oil prices will skyrocket because Russia is one of the largest suppliers of oil and oil products to the world market. As for the consequences that we will face, objectively, there will be logistics issues. However, solutions have been figured out," the lawmaker stressed. According to him, it will be possible to make payments through friendly countries. Besides, Western companies, too, will probably work under someone else’s flag, trying to retain their profits. That said, it will be another blow to a market based on monopolization, Ananskikh emphasized.

"The West views the recent referendums and the subsequent inclusion of the new regions into Russia as a very serious move that delays the resolution of the conflict. The West will undoubtedly refuse to recognize the outcome of the vote and everything will unfold according to the Crimean scenario but in a tougher way," Russian International Affairs Council Director General Andrey Kortunov noted. It keeps getting harder for the EU to adopt each new package of sanctions because all measures that won’t cause much harm to the European economy have already been taken, the expert explained.


Nezavisimaya Gazeta: Russia, Afghanistan seek to break isolation

The Taliban movement (outlawed in Russia) announced preliminary agreements with Moscow on energy and agricultural exports to Afghanistan. Western media outlets described the accords as the biggest international economic deal that the Taliban had reached since coming to power in 2021, Nezavisimaya Gazeta notes.

According to Acting Minister of Trade and Industry in the Taliban government Nuriddin Azizi, the deal is about importing Russian gasoline, diesel fuel, gas and wheat. The agreement was the main focus of the talks that an Afghan negotiating group had been engaged in for several weeks. There were assumptions that the Taliban would pay for Russian exports using the barter system because attempts to get back the Afghan Central Bank’s assets frozen by the US had failed.

Researcher at the Russian Academy of Sciences’ Institute of Oriental Studies and Director of the Center for Contemporary Afghan Studies Omar Nessar pointed out that Taliban officials sought to send specific political messages through the export deal with Russia. "It is a signal both for the Afghan public and the global audience," the expert noted. "Given the tightening of sanctions against Taliban leaders, the signal is primarily aimed at emphasizing the opposite," Nessar said. According to him, the fact that the agreement is a probationary one leaves room for a change of position. This is why, in Nessar’s words, there are more political than economic aspects to the situation around the deal.

At the same time, the initiative may be viewed in the context of various groups of influence within the Taliban competing to strengthen power, the analyst added.


Izvestia: Ankara, Moscow working on alternative to sanctioned payment system

Turkey may suggest creating a new bank that won’t come under sanctions pressure from the United States and the European Union and will be able to work with Russia’s Mir payment system, Russian-Turkish Business Council Director Alexey Yegarmin told Izvestia.

"It will probably be a special bank or a special system based on blockchain payments. Perhaps, there will be a separate payment center. We are searching for a solution and will make an announcement in the coming days, that’s Turkey's position," he clarified.

"I believe that it will be possible to consider the prospects for the national payment system as early as in the next few days," envoy of the Russian Chamber of Commerce and Industry in Turkey Ilya Kornilov noted.

Turkish parliament member Ozturk Yilmaz emphasized that Washington’s sanctions did threaten the Turkish banking system, which was the main reason why the country’s banks had refused to continue working with the Mir system. However, Ankara is interested in finding an alternative so another payment mechanism will be created soon.

Turkish political scientist Kerim Has expects that Russian tourists will continue to travel to Turkey next year in any case, regardless of the issues with the Mir system. "I don’t think that Erdogan will be willing to give up the Russian market in terms of trade because the Turkish economy greatly needs Russian money at the moment," the expert said.


Kommersant: Chinese currency gaining foothold on Moscow Exchange

Most foreign currencies have plunged to the lows of two to three months ago on the Russian market. Meanwhile, transactions involving China’s currency keep growing. The Moscow Exchange is launching new money market instruments to manage yuan liquidity, Kommersant writes.

The reason for the high yuan activity is that companies are moving to using the currencies of friendly countries in foreign trade.

Head of Global Investment at Otkritie Investment Mikhail Shulgin points out that businesses have been actively pivoting to the East over the past several months, promoting contracts based on yuan payments. In this regard, the analyst mentioned major exporters such as Gazprom, Rosneft and Rusal.

The new instruments will be in demand with businesses and banks as part of efforts to effectively manage funds in yuan accounts. "The new tools will make it possible to fill the market of yuan bonds with liquidity and increase the attractiveness of yuan borrowing for other Russian companies," the expert noted.

However, liquidity management tools are not enough to fully replace the dollar with the yuan. Head of Research at Zenit Bank Vladimir Yevstifeyev points out that businesses will be interested in options and dual-currency deposits in yuan.

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