Putin's $50 Billion Oil Cache Gives Russia Luxury to Ignore ECB
- No stimulus needed while cash floods economy: Morgan Stanley
- Bank of Russia seeks `control' over Ruonia lower than own rate
An oil worker inspects a pumping jack, also known as a 'nodding donkey,' during drilling operations in an oilfield operated by Bashneft PAO in the village of Otrada, 150kms from Ufa, Russia, on Saturday, March 5, 2016. Bashneft is an upstream and down stream oil & gas provider which explores, produces and refines its own oil and gas which it extracts from brownfield reserves in the Russian Federation.
Photographer: Andrey Rudakov/BloombergRussian central bankers have fewer reasons to offer relief to their recession-wracked economy than you might think.
Their decision whether to resume an interest rate-cutting cycle this week is almost beside the point as the government of Vladimir Putin lubricates the economy in the background with oil wealth amassed in better times. Russian banks are sitting on the most cash in five years, allowing them to lend to each other at a lower rate than they borrow from the central bank. In the euro zone and in the U.S., money market rates are higher than benchmarks.