The banking system in Russia is making its first moves to diversify away from U.S. card providers as Gazprombank signs a deal with Chinese UnionPay and amid ongoing geopolitical tensions and weak Russian ruble.
The third largest Russian Bank, Gazprombank, signed a deal to issue UnionPay cards through the Chinese payment system. The move is the first initiative to diversify card offerings away from VISA and MasterCard.
The bank is the third largest in Russia and has been deemed by Moody’s as systemically important. According to the company’s announcement, clients of the bank will be able to open a separate account to link their UnionPay card to their funds, or use an existing account which has already been connected to VISA or MasterCard.
This spring, as the US/EU sanctions hit the operations of other major banks, Rossiya and SMP bank and the payment systems VISA and MasterCard ceased to deal with their clients, and the Russian government voiced its opinion that some alternatives needed to be found.
From the two options which they had (the other being Japanese JCB), the winner was UnionPay which was granted a license to operate in Russia last autumn. UnionPay’s operations are run through a local subsidiary of the Bank of China, named AKB Bank Kitaya.
The first emission will number 100,000 cards building on a partnership which started all the way back in 2009. In April 2014 Gazprombank signed an agreement to extend the company’s cooperation with UnionPay International which includes the new offering.
SWIFT Discussions
As the rift between the West and Russia was deepening, in July the Russian Central Bank and the government’s financial and economic departments stated that a bill has been drafted to create a Russian analog to the SWIFT international financial message system.
The move responded to concerns of the Russian government that the country may be excluded from the SWIFT (Society for Worldwide Interbank Financial Telecommunications) payment system, should tougher sanctions be applied at any point in time in the future.
In the beginning of September, as the conflict in Eastern Ukraine was further escalating, UK’s Prime Minister, David Cameron, voiced a proposal to block Russian banking access to the SWIFT system.
However, the response by German Chancellor Angela Merkel, after the EU summit had contemplated new sanctions against Russia, was that there was no discussion of such a move.
Nevertheless, Russia has taken a move to secure its diversification from the SWIFT payment system, discussing with China to set up a system of interbank transactions which will become an analogue to SWIFT.
Challenging Macro Environment
According to a forecast by BCS Prime, we are likely to see higher inflation figures in Russia by the end of 2014 (8%) and 2015 (7.1%), despite the central bank raising interest rates to current levels at 8%. The ‘tit-for-tat’ sanctions have hammered the Russian ruble to all-time lows and future inflation numbers are very likely to be influenced by this new status quo.
Recent events made ruble Liquidity more expensive as rising pressure on price stability is expected to squeeze the Bank of Russia to tighten monetary policy further. BCS Prime forecasts a 25-50 bps hike in the benchmark 1-week repo lending rate of CBR in 2014.
In a recent note on the Russian market, the firm stated, “Should geopolitical risk start to ease, global recovery continues and government plans to raise taxes will not materialize – the official rate could remain stable throughout 1H15 before starting to come down back to 8% in 2H15.”
Too bad none of these conditions are likely to be fulfilled. Adding to the pressure on the local currency market are dropping oil prices which are now at key technical support levels just below $100 (for Brent crude).
The Bank of Russia has been aiming to introduce free floattrading for the Russian ruble in 2015, this goal now seems unachievable as the lack of central bank intervention could unleash even more dramatic moves on the currency markets.
Unless we see higher geopolitical and oil price risks going forward, we expect the ruble to remain in the current range until the end of this year. We now forecast the ruble to trade at around RUB37/$ by the end of 2014 and at RUB37.7/$ at the end of next year.
The third largest Russian Bank, Gazprombank, signed a deal to issue UnionPay cards through the Chinese payment system. The move is the first initiative to diversify card offerings away from VISA and MasterCard.
The bank is the third largest in Russia and has been deemed by Moody’s as systemically important. According to the company’s announcement, clients of the bank will be able to open a separate account to link their UnionPay card to their funds, or use an existing account which has already been connected to VISA or MasterCard.
This spring, as the US/EU sanctions hit the operations of other major banks, Rossiya and SMP bank and the payment systems VISA and MasterCard ceased to deal with their clients, and the Russian government voiced its opinion that some alternatives needed to be found.
From the two options which they had (the other being Japanese JCB), the winner was UnionPay which was granted a license to operate in Russia last autumn. UnionPay’s operations are run through a local subsidiary of the Bank of China, named AKB Bank Kitaya.
The first emission will number 100,000 cards building on a partnership which started all the way back in 2009. In April 2014 Gazprombank signed an agreement to extend the company’s cooperation with UnionPay International which includes the new offering.
SWIFT Discussions
As the rift between the West and Russia was deepening, in July the Russian Central Bank and the government’s financial and economic departments stated that a bill has been drafted to create a Russian analog to the SWIFT international financial message system.
The move responded to concerns of the Russian government that the country may be excluded from the SWIFT (Society for Worldwide Interbank Financial Telecommunications) payment system, should tougher sanctions be applied at any point in time in the future.
In the beginning of September, as the conflict in Eastern Ukraine was further escalating, UK’s Prime Minister, David Cameron, voiced a proposal to block Russian banking access to the SWIFT system.
However, the response by German Chancellor Angela Merkel, after the EU summit had contemplated new sanctions against Russia, was that there was no discussion of such a move.
Nevertheless, Russia has taken a move to secure its diversification from the SWIFT payment system, discussing with China to set up a system of interbank transactions which will become an analogue to SWIFT.
Challenging Macro Environment
According to a forecast by BCS Prime, we are likely to see higher inflation figures in Russia by the end of 2014 (8%) and 2015 (7.1%), despite the central bank raising interest rates to current levels at 8%. The ‘tit-for-tat’ sanctions have hammered the Russian ruble to all-time lows and future inflation numbers are very likely to be influenced by this new status quo.
Recent events made ruble Liquidity more expensive as rising pressure on price stability is expected to squeeze the Bank of Russia to tighten monetary policy further. BCS Prime forecasts a 25-50 bps hike in the benchmark 1-week repo lending rate of CBR in 2014.
In a recent note on the Russian market, the firm stated, “Should geopolitical risk start to ease, global recovery continues and government plans to raise taxes will not materialize – the official rate could remain stable throughout 1H15 before starting to come down back to 8% in 2H15.”
Too bad none of these conditions are likely to be fulfilled. Adding to the pressure on the local currency market are dropping oil prices which are now at key technical support levels just below $100 (for Brent crude).
The Bank of Russia has been aiming to introduce free floattrading for the Russian ruble in 2015, this goal now seems unachievable as the lack of central bank intervention could unleash even more dramatic moves on the currency markets.
Unless we see higher geopolitical and oil price risks going forward, we expect the ruble to remain in the current range until the end of this year. We now forecast the ruble to trade at around RUB37/$ by the end of 2014 and at RUB37.7/$ at the end of next year.
Finalto Unveils Guidelines for Retail Brokers: "Compliance Is a Culture of Responsibility"
Network, Learn, Grow | FMAS:24
Network, Learn, Grow | FMAS:24
Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
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#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
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Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
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Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
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Don't miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!
Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
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Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
📣 Stay updated with the latest in finance and trading!
Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today:
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Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
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Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today:
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Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
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Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
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