Moscow Enterprises Are Increasing Investment Activity

Moscow enterprises continue to increase their investment activity. Investments of manufacturing companies in fixed assets in January–June of this year increased in nominal terms by more than 74% compared to the same period last year and amounted to 75.9 billion rubles, according to the investment portal of the city of Moscow.

The increase in the volume of investments in the economy of the capital is facilitated by the systemic and anti-crisis support that the city provides to business. Moscow issues preferential loans and subsidies to enterprises for the development of production, provides land for rent without bidding for the implementation of large-­scale investment projects, and is reducing the regional tax burden.

In total, investments in fixed assets in Moscow from 2017 to 2021 amounted to 20.3 trillion rubles. In just the first half of 2022, the volume of investments in the fixed assets of the capital exceeded 1.9 trillion rubles. This is 4.4% more than in the same period last year.

 

Chinese Business Is Interested in the Development of the Capital’s Economy

Moscow and China are linked by strong trade and economic relations. According to the latest data of the Central Bank of the Russian Federation, the accumulated volume of China’s foreign direct investment in the economy of the Russian capital amounts to 910 million dollars. Of this, $616 million is accounted for by participation in the capital of Moscow enterprises.

The foreign trade turnover between Moscow and China increased by almost a third last year, reaching $64.5 billion. In total for 5 years, Chinese business investments in the city’s economy have increased 1.3 times.

China – along with Brazil, India, and the countries of Southeast Asia and Africa – is counted among the strategic partners and the largest importers of products from Moscow. Despite the sanctions pressure, the capital’s companies continue to increase their supply of equipment and goods, as well as purchase the necessary raw materials and components from suppliers from China. In particular, Moscow industrial companies were able in China to find a replacement for European printing materials, as well as equipment for refrigeration-­warehouse production complexes.

 

Moscow Entrepreneurs Will Continue to Receive the Support of the City

Despite sanctions and foreign policy pressure, Moscow will continue to implement its urban development plans. Among the main budget programs adopted by the Moscow Duma for the period up to 2025 are further financing of investment projects and support for the real sector of the economy.

In the spring of 2022, the federal governing bodies, together with the government of the capital, took measures to maintain the region’s economy at a stable level and help it with adaptation measures in connection with the changed conditions. Support was received by the industries and citizens who are most in need of it. In the second half of the year, the economic situation in Moscow began to stabilize.

In early November, the city Duma adopted the budget for 2023-2025. Further economic development of the capital is a priority in it. About 40% of the budget (1.7 trillion rubles) is for 2023. Moscow businessmen will continue to receive support – as soft loans, subsidies, grants, and the like. Also, the city will not forget about the creation of innovative and import-­substituting industries, and will improve the conditions for the development of the tourism sector.

The Moscow government provides comprehensive support to enterprises. For example, the city has launched a service for the selection of alternative suppliers; more than 500 applications have already been received.

 

Cash Outflow from Russian Banks Has Decreased Fivefold

In September–October 2022, the outflow of cash from banks was recorded at a much lower level than in February–March. “In general, in September–October, the outflow of cash was less than in February–March. In September, if I am not mistaken, it was about 500 billion rubles – and in October about 100 billion rubles. According to the first data of November, we see that cash transactions are returning to the seasonal norm,” said the head of the Central Bank of the Russian Federation, Elvira Nabiullina, speaking at the Finopolis forum.

In September, according to the regulator, the volume of funds of the population in banks decreased by 458 billion rubles, or 1.4% – which was a record for the entire crisis period that began in February 2022. In February, the balances on the accounts and deposits of individuals decreased by 1.2 trillion rubles.

At the same time, the volume of cash in circulation in September increased by 865.8 billion rubles. In October, this figure fell to 266.5 billion. The most noticeable jumps were observed on September 22 after the announcement of partial mobilization (132.1 billion rubles), as well as on September 30 (144.8 billion rubles).

 

Sber’s Net Profit Exceeded 50 Billion Rubles

The bank’s net profit for 10 months amounted to more than 50 billion rubles. “According to the results of 10 months, Sber restored profitability. Net profit since the beginning of the year exceeded 50 billion rubles, and in October the bank earned 122.8 billion rubles. The business shows good growth: the retail portfolio has added 9% since the beginning of the year, and the corporate one has grown by 11.9%, without taking into account currency revaluation,” describes the head of Sberbank, German Gref, in RBC. According to the top manager, the monthly volume of loans has returned to the level of the second half of 2021. The agency notes that Sber has disclosed its financial indicators for the first time since the beginning of the special operation in Ukraine and the introduction of the large-­scale anti-­Russian sanctions under which the leading Russian banks fell.

 

Business Will Be Asked to Turn to a Profile

Within five weeks, the Ministry of Digital Development will present businesses with the Digital Profile project. According to Finmarket, the service will allow entrepreneurs to exchange legally significant data with banks, insurance organizations, etc., and to receive services and services remotely. “The first company that does this will probably go down in history,” said Dmitry Oguryaev, deputy head of the ministry, responding during the Finopolis forum – adding that there are no similar services for business elsewhere in the world.

The Digital Profile project is aimed at improving the efficiency and speed of business service, as well as simplifying the work of financial institutions with data on companies contained in state IT systems. The project is positioned as a way to optimize business processes, which will speed up the procedures for starting and running a business, as well as reduce the cost of document flow.

The intention to create a “digital profile” for legal entities became known in January 2021. The subjects of this can be both individuals and legal entities, but there is much more data about legal entities. So for individuals such a service has already been operating since May 2020, and for legal entities it is planned to launch at the end of 2022.

 

The Central Bank Has Dispelled Myths about the New Form of the Ruble

The digital ruble that the Central Bank promises has not yet appeared, but it has already generated plenty of myths around itself. Specialists of the educational project of the Bank of Russia, “Financial Culture,” have outlined in their Telegram channel seven popular but erroneous statements about the new form of the Russian currency, which banks have already begun to test.

Myth one: This is another cryptocurrency. Not at all – this is the third, digital form of the Russian national currency, which is issued by the Bank of Russia and is its responsibility. “Cryptocurrencies are private digital currencies; they do not have a single issuer, and they are not anyone’s responsibility,” the Central Bank explains.

The second common misconception is that the digital ruble is no different from the non-cash ruble. The difference between them is actually fundamental. Unlike non-cash money, which is an entry in the account of a particular bank, digital rubles will be stored on the platform of the Bank of Russia. You can access them through any financial organization.

It is also wrong to say that the digital ruble is a way to control the money of citizens. The Bank of Russia assures that all information – about wallets, digital rubles stored on them, and any payments and settlements carried out – is a bank secret protected by law. The Central Bank and other regulators have access to certain information within their authority – just as is the case now.

The Central Bank stresses that the digital ruble is better protected from cyber criminals, and will also help increase the effectiveness of procedures to counter money laundering and terrorist financing. “All operations will take place on the platform of the Bank of Russia through channels with cryptographic protection. User data will be stored in strict confidentiality, using the latest cyber protection technologies. Each transaction in digital rubles will take place only if the client confirms it with his electronic signature. The safety of digital rubles will not depend on an individual bank – it is guaranteed by the Bank of Russia,” the Central Bank explains.

Experts also report that there will be no separate exchange rate for the digital ruble, since the rate is formed in relation to foreign currency for the ruble overall, regardless of the form: cash, non-cash or digital. In addition, its release will not accelerate inflation, since there will not be more or less money in the country. The digital ruble “will appear in circulation gradually, not in addition to the existing forms of money, but partially replacing them.”