Business News

Firms are leaving Russia, and Fitch predicts a ‘imminent’ default

As a result of Russia’s financial isolation following its invasion of Ukraine, Starbucks Corp. and Coca-Cola Co. have joined a steady stream of firms stopping operations or withdrawing from the nation. Fitch Ratings has predicted that a bond default is “imminent.”

According to the US, Russian soldiers have increased their bombing of Kyiv, Ukraine’s capital. According to Interfax, Moscow has announced a cease-fire on Wednesday in order to enable humanitarian corridors from Kyiv, Chernihiv, Kharkiv, Sumy, and Mariupol.

President Vladimir Putin has signed an order banning the trade of various products and raw resources. Before foreign-exchange trading resumes in Moscow after an extended hiatus, the ruble was quoted lower against the dollar in the offshore market.

Important Developments

The United States and the United Kingdom have imposed sanctions on Russia’s oil imports, tightening the pressure on Putin.

As Sanctions Reverse the Clock, Putin Clings to the Market Economy.

Putin’s endgame appears to be reducing Ukraine to sand.

Metal traders reel as the nickel chaos brings back memories of the market’s darkest days.

In the face of backlash, McDonald’s and Coca-Cola have taken a break from Russia.

CET (Central European Summer Time):

Stocks Rise as Crude Oil Prices Rally Moderately (3:57 a.m.)

On Wednesday, Asian stocks gained in tandem with U.S. and European equities futures, providing some relief from the turmoil generated by Russia’s invasion of Ukraine. Risks of inflation placed government bonds on the defensive.

Crude rose, although at a slower rate, as the market processed the United States’ decision to prohibit Russian fossil fuel imports as retaliation for the war. The United Kingdom will also ban Russian barrels, but natural gas and coal will be exempt. At close to $125 a barrel, West Texas Intermediate oil was near its highest level since 2008.

Wheat Prices Drop as Traders Evaluate Supply (3:12 a.m.)

Wheat futures fell over 5% as traders assessed the global supply forecast, despite the fact that one of the world’s biggest grain-growing countries is ravaged by war.

More than a quarter of the world’s supply of a food staple used in everything from bread to cookies and noodles has been virtually cut off due to the conflict in Ukraine. Corn, barley, and sunflower oil are additional key exports from Ukraine and Russia.

Wheat prices are falling as traders weigh supply in the midst of the Ukraine conflict.

Defense Secretary Meets with Opponents (2:12 a.m.)

On separate calls with his British, French, and Slovak colleagues, Defense Secretary Lloyd Austin discussed how NATO countries might improve the alliance’s eastern flank, according to a Pentagon statement.

Congress postpones a vote on a Russian oil embargo (1:15 a.m.)

A planned House vote on legislation prohibiting the import of Russian oil into the United States has been postponed, despite President Joe Biden’s decision to take executive action in the face of mounting political pressure.

According to a Democratic aide, Democrats now plan to hold the vote on Wednesday, bringing it to the floor with a $1.5 trillion omnibus funding measure. Late Tuesday, squabbling between the two main parties surfaced, slowing the bipartisan bill’s approval.

Pelosi Postpones Vote on Russian Crude Oil Import Ban

Fitch downgrades Russia’s bond rating, predicting a ‘imminent’ default (11:39 p.m.)

Fitch Ratings downgraded Russia’s national debt rating to the second-lowest level, claiming that a bond default is “imminent” due to the country’s financial isolation following the Ukraine incursion.

Fitch noted a Russian law requiring some foreign-currency-denominated Russian bonds to be repaid in rubles, which have plummeted in value since the war began.

New Foreign-Exchange Restraints Imposed by Russia’s Central Bank (11:27 p.m.)

Starting March 9, Russia’s central bank restricted banks from selling physical currency to residents who do not already have foreign exchange accounts for a six-month term in an effort to stem the ruble’s decline. FX account users can withdraw up to $10,000 in cash, but subsequent withdrawals will be made in rubles at market prices.

The action follows the Bank of Russia’s announcement last week that brokers would be charged 30% on currency conversions and that cash transfers out of Russia over $10,000 would be prohibited. As markets fell, Russians scrambled to withdraw cash in both foreign money and rubles.

Paypal’s service in Russia has been suspended. Coca-Cola comes in second after Starbucks (11:09 p.m.)

PayPal Holdings Inc. has announced that it will cease operations in Russia, joining the list of American corporations that have left the nation, including Starbucks Corp. and Coca-Cola Co.

Starbucks’ licensee will help the over 2,000 partners in Russia who rely on the company for their livelihood, according to a statement posted on the company’s website on Tuesday. Last week, the business announced that earnings from sales in Russia would be donated to Ukraine rescue efforts.

The US may retaliate against Chinese companies that defy sanctions (10:12 p.m.)

In an interview with the New York Times, Commerce Secretary Gina Raimondo said the US might take “devastating” action against Chinese corporations who flout Russian sanctions.

If companies like Semiconductor Manufacturing International Corp. continue to send advanced technology to Russia, she claimed the administration may “effectively shut them down.” In reaction to Russia’s invasion of Ukraine, the US and its allies enacted export restrictions aimed at limiting Russia’s access to such technology.

Russia Issues a Vague Export Restrictions Order (9:05 p.m.)

In reaction to US and other country sanctions, Putin signed an order restricting trade in specific goods and raw materials, but he left out important details about which products would be affected.

According to a government statement, the president stated that his cabinet still needs to define such topics. The Kremlin has given the administration two days to produce a list of nations to whom the restrictions will apply.

Apart from restrictions on the export of money, Russia’s retaliatory measures have been unclear thus far, including the compilation of a “unfriendly country” list and threats to cut off natural gas supplies to Europe via the Nord Stream 1 pipeline. Russia is a major exporter of crude oil, natural gas, grains, and metals.

Poland says it may send MiG-29 fighter jets to a US base (9:02 p.m.)

The Polish Foreign Ministry stated that the government is prepared to transfer all of Poland’s MiG-29 fighter jets to the US air base in Ramstein, Germany, and put them at the service of the US.

The manoeuvre is most likely part of a larger plot to get the jets into Ukrainian territory. However, it’s unclear whether the US or NATO countries would back such an endeavour because sending the jets into Ukraine from Germany would be considered as an act of aggression by Russian President Vladimir Putin. Officials from the Pentagon did not immediately respond to a request for comment on the idea.

In Sumy, There Has Been Some Progress With Civilian Evacuation (8:45 p.m.)

According to Kyrylo Tymoshenko, a prominent Ukrainian official, 61 busloads of residents have been evacuated from the northeastern town of Sumy to Poltava, while 1,000 foreign students are heading by train to the border city of Lviv. Some Sumy people have been able to go on their own.

According to Interfax, a Russian official at the humanitarian coordination headquarters announced a’silence’ time on Wednesday in order to open humanitarian routes from Kyiv, Chernihiv, Kharkiv, Sumy, and Mariupol.

The US Congress is preparing billions of dollars in Ukraine aid (8:38 p.m.)

Congress intends to increase aid to Ukraine to more than $13 billion.

The financing, which is an increase over the Biden administration’s initial request of $10 billion, will go toward dealing with a growing humanitarian catastrophe impacting Ukraine’s neighbours and bolstering Pentagon support, which will assist Ukraine replace weaponry and other supplies. Mitch McConnell, the Republican leader in the Senate, said the financing includes loan guarantees for countries like Poland to buy American-made jets after donating their Russian-made planes to Ukraine.

The money will be included in a $1.5 trillion yearly budget package that the House is likely to vote on as soon as Wednesday.

According to the US, Russian forces have increased their bombing of Kyiv (8:04 p.m.)

According to a senior US defence official, Russian forces have increased their bombing of Kyiv, a key strategic target in their invasion, with isolated fighting inside the capital city.

The majority of Russian forces, however, are still roughly 60 kilometres (37 miles) from Kyiv, according to the official. According to the official, who spoke on the condition of anonymity, Russia has also succeeded in isolating Mariupol, a southern port city, but has not yet taken it.

NATO is ‘afraid of controversial things,’ according to Zelenskiy. (It’s 7:13 p.m.)

After Agence France-Presse re-reported comments made by Ukrainian President Volodymyr Zelenskiy in an interview with ABC News late Monday, U.S. markets rose. “In a gesture to Russia, Ukraine says it will no longer push for NATO membership,” according to AFP.

“Regarding NATO, I have cooled down regarding this topic a long time ago once we recognised that NATO is not prepared to welcome Ukraine,” Zelenskiy stated in an interview with ABC News. The alliance is wary of contentious issues and conflict with Russia. I never wanted to be a country that was on its knees pleading for help. And we won’t be that country, and I certainly don’t want to be that president.”

Zelenskiy’s remarks do not imply that he has given up on the country’s goal of joining NATO in the future. Although the military alliance claims to have an open door policy, it has made it obvious that considerable impediments remain in the way of Ukraine joining, and that this will not happen anytime soon.

The BBC will resume reporting from Russia in English (6:31 p.m.)

At the end of last week, the British broadcaster halted English-language reporting from Russia. The BBC stated in a statement that it had evaluated the consequences of Russia’s recently enacted media legislation as well as the “urgent necessity” to report from within the nation.

A push to join NATO, according to Sweden’s prime minister, would exacerbate insecurity (5:30 p.m.)

“It would further destabilise this part of Europe if Sweden chose to make an application to NATO in this situation,” Prime Minister Magdalena Andersson stated at a press conference. “In my opinion, sticking to Sweden’s long-standing, consistent approach is the greatest way to ensure our security.”

Italy is preparing to support additional EU sanctions against Russian banks (5:20 p.m.)

The purpose of a third package of EU penalties, according to Foreign Minister Luigi Di Maio in an interview with Bloomberg, would be to drive Russia into a cease-fire.

The EU will not succumb to “Russian extortion” in the energy sector, according to Di Maio, who was referring to a threat to restrict natural gas supply via the Nord Stream 1 pipeline. In recent days, Di Maio has flown to Algeria and Qatar to explore increased gas supply from both countries. Russia accounts for 40% of Italy’s gas imports.

About the author


Kathy Lewis

Kathy Lewis is an all-around geek who loves learning new stuff every day. With a background in computer science and a passion for writing, she loves writing for almost all the sections of Editorials99.

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