Russia’s invasion of Ukraine led to one of the worst economic crises in modern Russian history. The Russian service of the BBC talks about the main economic events of the day.

Ministry of Finance loosens its grip

On Monday morning, Bloomberg, citing sources , reported that the Russian authorities are preparing to reduce the percentage of revenue that exporters must exchange for rubles. Literally a few hours later, the Ministry of Finance announced that they could sell not 80% of foreign exchange earnings, as required from February 24, but 50%.

Officially, this was explained by the fact that the ruble exchange rate has stabilized, and there are no problems with foreign currency on the market (both formally true). But in fact, the decision of the Ministry of Finance speaks not of the triumph of the ruble, but of “the growing discomfort of the authorities from its strengthening,” writes Dmitry Polevoy, investment director at Loko-invest.

The “discomfort” is due to the fact that the stronger the ruble, the lower the income from the sale of raw materials abroad in terms of the Russian currency. This worries both exporters and state budget compilers.

Today’s decision of the Ministry of Finance will ease this “discomfort”, if at all, but not immediately. After the agency’s statement, the dollar and the euro rose against the ruble by a few kopecks and are still trading at multi-year lows. Euro – about 60, dollar – about 57-58 rubles. BCS analysts attribute this to the fact that lowering the threshold to 50% did not come as a surprise to anyone.

Moscow will “take patronage” over Donetsk and Lugansk, RBC reports citing sources. The details are yet to be known, but the main thing is that the Russian capital will allegedly have to finance the restoration of these cities from its own budget. About what amounts we are talking about, is still unknown.

Earlier that the Russian regions will take patronage over the areas of the so-called Donetsk and Luhansk people’s republics, said the deputy head of the presidential administration Sergei Kiriyenko. He claimed that this was a personal decision of Vladimir Putin. They can choose sponsored regions “at their own discretion,” the Kremlin spokesman assured.

The “patronage” of the Russian regions was also established outside the territories of the annexed Crimea in 2014: for example, Moscow got Sevastopol, St. Petersburg – the Simferopol region, and Voronezh – the Dzhankoy district.

The Russian media argued about the name of the McDonald’s restaurant chain sold to the former franchisee. First, Izvestia, citing a source, wrote that signboards in Russia would have two letters “Mc”, and “M” would be branded.

But the general director of McDonald’s in Russia immediately told TASS that the yellow letter “one hundred percent” would not be retained in the design of the restaurant: “a new enterprise cannot operate under the old brand.”

The exodus of foreign business from Russia continues. Following cheeseburgers and cherry pies from McDonald’s, another symbol of the free 1990s is leaving Russia: the Levi’s denim chain, Kommersant writes . She came to Russia in 1993, and after the start of the war she suspended operations on the Russian market. Now Levi’s, according to the newspaper, has decided to leave it completely.

Kommersant, citing sources, describes different scenarios for the future of the brand in Russia. The options are as follows: either the goods already delivered to Russia will be sold through foreign sites, or there will be a buyer for the business (Turkish Fiba Holding AS is called among the applicants).

The symbol of not the nineties, but the “well-fed” two thousandths, the American Starbucks, decided to leave Russia after 15 years in this market. After the outbreak of the war, the company temporarily closed all 130 Russian coffee houses (there are more than 30 thousand in the world) and stopped supplying its goods to the country. Now these decisions are fixed as final.

In its withdrawal from Russia, Starbucks says it will continue to pay the salaries of its nearly 2,000 “green apron” employees for six months and even help them find work outside of Starbucks. However, how exactly this will be implemented is unclear.

Starbucks plans not to sell, but to liquidate the Russian legal entity, Kommersant writes. It is called “Coffee Sirena” and has existed since 2007, when the first Starbucks opened in Russia. The network’s net profit in Russia in 2021 amounted to a little less than 200 million rubles (SPARK data). And Starbucks as a whole, by comparison, had $4.2 billion over the same period.