Elvira Nabiullina, Russia's top central banker, expressed that concern on Friday when she kept the key interest rate unchanged. Analysts polled by Reuters had expected her to hike rates to 23%.
"Our politics is aimed at prevention of extreme scenarios, which means that we cannot let the economy overheat further," Nabiullina said at a press conference following the rates decision, according to TASS state news agency.
"It is necessary to make sure that overheating subsides. That said, it is necessary to avoid excessive cooling, which is why we keep a close eye on this," she said.
Nabiullina said the central bank kept the interest rate steady as monetary conditions have "tightened even more than was implied by the key rate increase" in October, when the bank raised the rate from 19% to 21%. Russia started the year with its benchmark interest rate at 16%.
"Consequently, lending growth notably slowed down in November," she said. "We will need some time to assess how steady this deceleration in lending is and how the economy is adjusting to the new conditions."
Russian business leaders complain about high interest rates
Nabiullina's comments came as Russia's inflation hovered around 8% in the year to November, compared to the target rate of about 4%. Staples, like the price of butter and potatoes, have shot up this year. But the central bank's three straight rate hikes since June may be working, the top central banker signaled.
"Tough monetary conditions have evolved in the economy, which are to provide for inflation slowdown in coming quarters," she said, per TASS.
Russian business leaders have been complaining about the central bank's high interest rates, which they say are stifling business activities.
Sergei Chemezov, the CEO of the defense conglomerate Rostec, said in October that record-high interest rates were "eating up" the profit from the company's orders.
"If we continue to work like this, then most of our enterprises will go bankrupt," Chemezov said.
Economic cracks in Russia
Even Russian President Vladimir Putin on Thursday acknowledged that his country's economy is not in a good place — and he blamed the central bank and federal government.
The Russian leader said that the central bank could have used instruments other than interest rates to cool the economy and that the federal government could have worked with economic stakeholders to improve supply.
"There are some issues here, namely inflation, a certain overheating of the economy, and the government and the central bank are already tasked with bringing the tempo down," Putin said during his marathon annual press conference.
Price rises had been an "unpleasant and bad" outcome, he said.
Given the sweeping sanctions against Russia's economy, Nabiullina faces a challenging job to keep Russia's seemingly resilient economy going.
Economic cracks are emerging as the Kremlin focuses on shoring up its defense industry for its war in Ukraine — but at the expense of other sectors, Alexandra Prokopenko, a fellow at the Carnegie Russia Eurasia Center fellow wrote on Friday.
Prokopenko, a former Russian central bank official, wrote that growth momentum could stall next year, with social and fiscal challenges developing into crises around 2026.
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North Korean troops have suffered losses since engaging in combat operations in Kursk, per US officials.
Korean Central News Agency/Korea News Service via AP
North Korean troops are engaged in combat against Ukrainian forces, the White House said.
They've had a rough start, and seem to lack experience with drones and working with Russians.
This has led to reported losses, but analysts said they should be able to learn to adapt.
North Korean troops have engaged in combat with Ukrainian forces in Russia's Kursk region, with media and intelligence reports suggesting they're off to a rough start.
Footage obtained by Radio Liberty on Monday showed Ukraine striking a group of soldiers, with sources telling the outlet that North Koreans were among them.
The same day, Ukrainian officials and soldiers told The Washington Post that North Korea's troops were operating in big groups out in the open, and were getting killed by drones they didn't realize were dangerous.
A senior US military official said this week that North Korea's dead and wounded could now be counted in the hundreds.
Military analysts told BI that, while the limited number of early reports makes it difficult to give a definitive assessment, they're not surprised by the reports.
"The North Koreans are taking apparently unnecessary casualties as they are rushed into combat without a period of training on the unique threats here," saidWallace Gregson, a former US Marine Corps officer and former assistant defense secretary for Asian and Pacific Security Affairs.
Uncharted territory
National Security Council spokesman John Kirby said on Monday that North Korean troops had moved to the front lines and were "actively engaged in combat operations."
Evans Revere, a senior advisor with Albright Stonebridge Group, said that while North Korean troops seemed "disciplined" and "tough," their lack of experience in ground combat and unfamiliarity with drone warfare was taking its toll.
He said that the reported casualty numbers suggest that North Korean forces are in the "thick of heavy fighting" and that "if the North Koreans continue to suffer casualties at this rate, they will very soon require fresh forces."
Revere also said their lack of Russian language and absence of experience in training and operating jointly with Russian forces seemed to be a problem.
On Saturday, Ukrainian intelligence said North Korean troops opened fire on Russian military vehicles, killing eight soldiers, due to a language barrier between the two forces.
North Korean leader Kim Jong Un watching troops in combat training in North Korea.
National Intelligence Service of South Korea
Too early, too inexperienced
The last time North Korean troops really fought was during the Korean War, where fighting ended in 1953.
Gregson said that this time around, Russia may have thrown North Korean troops to the front in earlier waves of attacks, which he said usually include the "least-trained" soldiers.
He told BI that "high casualties" weren't unexpected, given their light infantry capabilities and the likely language barrier.
However, he said you needed to respect their "apparent courage and determination — and sacrifice — in a conflict not of their choosing far from their home."
Military analysts also said that the North Korean troops could soon adapt to the new battlefield conditions.
Revere said it won't be long before the North Koreans learn how to operate in this environment.
However, he said it's "still not clear" how well Russian and North Korean troops are operating in tandem, or whether Russian commanders are providing good leadership and guidance.
The UK Ministry of Defence said in an intelligence update on Thursday that Russian and North Korean forces were "almost certainly" experiencing difficulties, with North Korean troops struggling to integrate into Russia's command and control structure.
Another major issue is their unfamiliarity with modern battlefield warfare.
John Hardie, the deputy director of the Russia Program at the Foundation for the Defense of Democracies, said the evidence so far suggests North Korean troops were unprepared for the drone threat.
But, he said, "Isuspect they'll adapt with time and may have started doing so already."
Covering up deaths
According to Ukrainian President Volodymyr Zelenskyy, Russia has been trying to conceal North Korean deaths. In a nightly address on Monday, he claimed that Russian forces were burning the faces of killed soldiers to conceal their identity.
Revere said attempts to cover up the deaths were likely part of Russia's effort to avoid admitting to the Russian people that the country lacks the ability to defeat Ukraine by itself.
North Korea has also often been the object of ridicule in Russia, he added, "so for the Russians to have to admit their need for DPRK support would be embarrassing."
For North Korea, the stakes are also high.
Bruce W. Bennett, a defense researcher and North Korea specialist at RAND, said that Kim Jong Un is taking risks by sending troops to support Russia, especially potential elite-class military personnel.
He said that Kim is unlikely to want to return the bodies of those killed to their families, fearing potential instability inside North Korea.
"Kim will likely prefer that the soldiers who are killed simply disappear," he said.
Vladimir Putin holds his annual press conference in December 2024.
Alexander NEMENOV / AFP
Russian President Vladimir Putin caps each year with an hours-long, choreographed Q&A session.
Key moments on Thursday covered Russia's fragile economy, the invasion of Ukraine, and Donald Trump.
Putin sought to project an image of a powerful, thriving Russia, despite heavy challenges before him.
Russian President Vladimir Putin held his marathon annual press conference on Thursday.
During the event, Putin fielded questions from members of the Russian public and journalists on issues ranging from spiking food prices to the war in Ukraine and global instability.
Here are some telling moments.
1) He acknowledged that Russia's economy is in a bad place
Putin opened the phone-in to discuss Russia's economy, acknowledging the inflation and high interest rates pummeling the country.
Putin sought to ready the Russian people for more pain, saying inflation could hit 9.5% in 2025.
He said price rises — especially for food — had been an "unpleasant and bad" outcome.
Soaring prices — particularly of eggs — prompted a rare apology from Putin last year.
2) He didn't take all the blame, though
Putin didn't take total responsibility for the economic situation.
Per Reuters, he said both the central bank and the Russian federal government — which is formally run not by Putin but by the Russian prime minister — could have done better to stop the economy overheating.
He denied Western sanctions were having a significant impact on the Russian economy.
"They are not a key factor," Putin claimed.
Putin speaks as a Russian military unit flag is held up during his December 2024 press conference.
Alexander NEMENOV / AFP
3) Putin couldn't say when he would retake captured Russian land
Putin was bullish on his invasion of Ukraine, boasting of recent territorial gains by Russian forces there.
But, unlike last year, he also had to contend with the reality of Ukrainian troops continuing to occupy Russian soil in the Kursk region.
The Kursk attack was the first foreign military incursion into Russia since World War II, and a huge embarrassment for the Kremlin.
One caller to Putin asked when she could return home to Kursk — and Putin couldn't answer.
"For sure, we will get rid of them" Putin said. He declined to give a date, saying that it would put Russian soldiers at risk.
Troops would "try to deliver on that without regard for their own lives," he said of what would follow if he gave specifics.
4) He boasted about Russia's new missile
The Russian president once again claimed that Russia had developed a new ballistic missile that Western defenses were incapable of intercepting.
Russia fired the powerful Oreshnik missile last month at Dnipro, Ukraine. Analysts saw the attack as a thinly disguised threat to the West after the US and its allies allowed Ukraine to strike Russia with long-range missiles.
Ukrainian officials said at the time that the missile was unusually powerful, and Putin claimed Thursday it travels at Mach 10, or ten times the speed of sound.
Western air defenses "stands no chance" of intercepting it, Putin said.
Some analysts were more measured in their assessment of the strike. The UK's Royal United Services Institute wrote in a recent analysis that the deployment of the Oreshnik was "more about political signalling than military utility in the war."
5) Putin was on the back foot over Syria's collapse
In response to a question by NBC News, Putin lengthily sought to rebut the idea that the collapse of the government in Syria leaves Russia weakened.
Putin had been a major international backer of the ousted Syrian president Bashar Assad, who fled to Moscow in the face of a rebel advance.
Business Insider reported that the swift collapse had caught Russia off guard, as well as Iran, Assad's other major supporter.
Putin defended Russia's support for Assad, claiming that its interventions there succeeded in preventing Syria from becoming a "terroristic enclave" like Afghanistan.
Apple is close to resolving its dispute over iPhone sales in Indonesia.
At a meeting on the weekend, Indonesia's president Prabowo Subianto told officials to accept Apple's $1 billion investment offer, Bloomberg reported, citing sources familiar with the matter. The offer was made in an effort to end the country's ban on iPhone 16 sales.
The southeast Asian country requires that at least 40% of the material in smartphones and tablets sold in stores nationally come from Indonesian producers — a measure to protect local producers and attract foreign investment.
Apple offered to expand its investment plans in Indonesia's growing tech economy in an effort to ease the ban.
The offer included a proposal for one of Apple's suppliers to set up a plant producing AirTags on the island of Batam, with the aim that it will one day account for 20% of global production of AirTags, Bloomberg reported.
Apple had previously proposed a $10 million payment for a factory in Bandung, located southeast of Jakarta, the country's current capital. The factory would manufacture accessories and components.
Former Indonesian President Joko Widodo meets Apple CEO Tim Cook in April.
Secretary President of Indonesia/Anadolu via Getty Images
The Indonesian market represents an insignificant portion of Apple's total sales globally, but has become one of the company's key alternatives in the region as it looks to move manufacturing out of China.
In April, CEO Tim Cook visited Indonesia and said that Apple was investigating the feasibility of establishing local manufacturing facilities there. The tech giant has already built four developer academies in Indonesia.
With over 280 million citizens, Indonesia is the world's fourth-most-populous nation and is a growing market for Apple.
Bloomberg reported that Subianto told his cabinet to seek more future investments.
Apple did not immediately reply to a request for comment made outside normal US working hours.
Russian President Vladimir Putin's war against Ukraine is straining his country's economy.
Contributor/ Getty Images
Russia may deploy its navy to protect its shadow fleet transporting sanctioned oil.
The West has increased sanctions on Russia's oil industry and is zooming in on its shadow fleet.
Russia's economy faces challenges like inflation, a weak ruble, and high interest rates.
Russia may ratchet up "risky and threatening behavior" against NATO countries, including by using the Russian navy to escort its shadow fleet through Danish waters, Denmark said on Wednesday.
The Danish Defense Intelligence Service made the assessment in its annual security outlook published on Wednesday.
"If this happens, it will increase the level of tension," said the Danish intelligence agency.
Denmark's assessment came as the West turns up sanctions against Russia's important oil industry, a key contributor to its war chest.
On Monday, the European Union sanctioned more Russian dark fleet vessels — designated as such because they dodge the G7's oil price cap by either submitting falsified financial statements or not having proper insurance coverage. A day later, the UK also broadened its sanctions against these vessels.
On Tuesday, a dozen Western countries, including Denmark, the UK, Germany, Finland, and Estonia, agreed to step up checks on the insurance coverage of suspected shadow tankers transporting Russian oil.
Russia's shadow fleet of mostly aging oil tankers grew after the G7 imposed an oil price cap on Russian oil in December 2022. The shadow fleet has helped Russia circumvent Western restrictions and allowed it to continue trading its oil at market prices, according to the EU.
Energy accounts for about one-fifth of Russia's GDP. The country's oil revenue fell 24% last year on the back of sanctions.
Oil revenues continue to be under pressure this year. Russia exported an average of 70,000 barrels of crude a day so far — 2% lower than the 2023 average, Bloomberg reported.
Russian economy under strain
The West's increasing pressure on Russia's energy trade is aimed at further straining the country's finances after nearly three years of war.
While Russia's economy has helped build strong financial buffers in the past years as war raged on, the economy faces "increasingly large unsustainable burdens," wrote Mark Sobel, the US chair of the Official Monetary and Financial Institutions Forum, a think tank, this week.
The energy giant's lucrative oil industry is also under pressure from global energy market dynamics, including an abundance of supply and slowing demand.
Russia faces numerous economic challenges, including soaring inflation, the plummeting ruble, record-high interest rates of 21%, and capital controls.
"Even if sanctions and blocked Russian assets are not going to bring Russia's economy to its knees in one fell swoop, they remain powerful leverage and can be used more forcefully in any agreement to end the fighting and secure Ukraine's future," wrote Sobel.
Aung San Suun Kyi’s imprisonment in a jungle jail marks the rise and fall of one of the world’s most iconic women as her country Myanmar is forgotten by the world, writes Peter Popham
Small and medium-sized enterprises (SMEs) account for nearly 50% of Southeast Asia’s GDP, contributing to job creation, innovation, and overall economic expansion. Nevertheless, as in other parts of the world, SMEs in Southeast Asia face challenges when it comes to sufficient working capital. In a nutshell, SMEs are typically deemed too risky for traditional banks […]
The U.S. on Wednesday issued fresh sanctions against several Russian-linked entities and individuals involved in the building of Nord Stream 2, the massive undersea gas pipeline linking Russia to Germany.
The State Department said it has re-imposed financial penalties against entities and individuals involved in the construction of Nord Stream 2, including project operator, Nord Stream 2 AG, and a Russian-based insurer that worked with companies involved in the pipeline's construction.
Others included in the sanctions were a Russian-owned maritime rescue service, a Russian-based water transport logistics company, and more than a dozen vessel owners that were either formerly under sanctions designations or were being sanctioned for the first time.
State Department deputy spokesperson Vedant Patel told reporters Wednesday that the U.S. remains opposed to Nord Stream 2 as well as any efforts to revive it.
Officials also cited Russia’s ongoing efforts to weaponize its energy resources, including throttling its piped gas supplies to Europe shortly after the start of its war in Ukraine in 2022.
"We're going to continue to work and ensure that Russia is never able to weaponize its energy resources and its energy positioning for political gain," Patel said of the new sanctions.
News of the new sanctions designations comes after both the Nord Stream 1 and 2 gas pipelines linking Russia to Europe were hit by a series of explosions in late September 2022.
To date, no one has taken responsibility for the blasts, which U.S. and other Western leaders have described as an act of potential "sabotage."
Russia has dismissed suggestions that it would blow up its own pipeline, with Russian President Vladimir Putin describing such a move as "idiotic."
Though neither pipeline was operational at the time, both lines were filled with gas under pressure.
Prior to Russia's war in Ukraine, the Nord Stream 1 pipeline had supplied roughly 35% of the European Union’s total Russian gas imports before Moscow halted supplies indefinitely citing "maintenance" needs. Nord Stream 2 was expected to double that capacity.
In the years since Russia’s war in Ukraine began, the EU has scrambled to offset its reliance on Russian energy supplies, including by purchasing more liquefied natural gas from the U.S. and other suppliers, by devoting more resources toward nuclear power and by building more regasification terminals, among other things.
The logo of Russia's energy giant Gazprom at a gas station in 2022.
Nikolay Doychinov/AFP via Getty Images
Gazprom's share price hit a 15-year low amid ongoing export challenges to Europe.
It comes after the company posted its first annual loss since 1999 in May.
The EU is pushing to phase out its use of Russian gas, impacting Gazprom's European market share.
Gazprom's share price tumbled to a new low on Wednesday, the latest episode in a calamitous year for the Russian state-owned energy juggernaut.
According to Russian outlet RBC, Gazprom's 106.1-ruble share price on Tuesday represented its lowest value since January 2009. As of Wednesday, the share price had dropped further to 105.75 rubles.
In comparison, just before Russia's full-scale invasion of Ukraine in February 2022, Gazprom's share price hovered around 300 rubles.
Analysts speaking to RBC attributed the slide to broader market factors as well as roadblocks in Gazprom's ability to export gas to Europe, as the continent doubles down on its commitment to end its dependence on Russian energy following Russia's invasion of Ukraine.
In May, Gazprom posted its first annual loss since 1999, and its share price immediately dropped by 4.4%. It continued to tumble through June, to a then-low of around 113 rubles.
The dreary May report reflected Gazprom's "loss of a significant share of the European gas market," Katja Yafimava, a senior research fellow at the Oxford Institute for Energy Studies, told Business Insider.
President Vladimir Putin (R) with Gazprom CEO Alexei Miller at the company's headquarters.
Alexander Kazakov / POOL / AFP via Getty Images
Impact of Russia's war
Prior to 2022, Europe sourced around 40% of its natural gas from Russia. In June, a Gazprom report seen by the Financial Times said that it would take a decade for the company to recoup losses caused by the war in Ukraine.
Compounding the concerns, an agreement to transit Russian gas via Ukraine is set to end on January 1, 2025.
In September, European Commissioner Kadri Simson said that the EU is "fully committed" to phasing out Russian gas via the Ukraine pipeline. "We started preparing two years ago," she said.
The move away from Russian gas is not without its headaches for EU countries, and Slovakia is leading efforts from some affected countries to stop this flow running out.
On Monday, following a meeting with Slovakia's prime minister, Ukrainian Prime Minister Denys Shmyhal reiterated what the country had been signaling for some time: that it has no interest in renewing the deal.
He added, however, that Ukraine is open to the transit of gas from other sources.
OMV's decision earlier this month was a historic blow to Gazprom, with the company among the first in Western Europe to import and invest in Russian gas during the Soviet era.
Industry experts told Business Insider this month that the end of the OMV deal was a significant indicator of Europe's success in weaning itself off Russian energy, one that would have been unthinkable before the invasion of Ukraine.
Even so, Gazprom's problems in Europe are not a death knell for the company, Yafimava said.
Gazprom can stay afloat thanks to the large domestic gas market in Russia, she said, adding that the blow had been cushioned by sharply increased gas prices.
Gazprom needs to find new markets "while the cushion lasts," she added.
One option ahead for it is an agreement over Power of Siberia 2, a Russia-China pipeline that would sharply increase exports to China. "In my view, this will eventually happen," Yafimava said.
In a wide-ranging interview with a Russian television station, the chief executive of Russia's main space corporation said the country is now planning to participate in the International Space Station project all the way to NASA's desired goal of 2030.
"In coordination with our American colleagues, we plan to de-orbit the station sometime around the beginning of 2030," the country's chief space official, Yuri Borisov, said during the interview. "The final scenario will probably be specified after the transition to a new NASA administration."
While the documents for such an extension have not been signed, these comments appear to represent a change in tone from Russia. When he first became head of Roscosmos in 2022, Borisov said Russia would leave the station partnership "after" 2024, which was interpreted as shortly thereafter. Later, Russia committed to working with NASA to keep the orbital outpost flying only through 2028. The US space agency has expressed a consistent desire to keep flying the station until 2030, after which point it hopes that private space station operators can provide one or more replacement facilities.
A Ukrainian F-16 fighter jet in an undisclosed location in August 2024.
AP Photo/Efrem Lukatsky, File
Ukraine said it stopped a Russian spy group gathering information on its F-16 fighter jets.
The group wanted to find out details on the airfields F-16s may be using, it said.
Ukraine said the group's leader was detained and other members indicted.
Ukraine said it disrupted a Russian spy ring that was collecting information on the F-16 fighter jets it was given by its Western allies.
The Security Service of Ukraine, or SBU, said on Tuesday that it had neutralized a network of Russian spies that was gathering information about military targets, including its F-16s.
According to the SBU, the group was tasked with trying to discover the locations of military airfields where F-16 fighter jets might be kept, as well as the locations of Ukraine's air-defense systems and companies that make electronic warfare systems to counter Russian drones.
It said the group was working across five regions in Ukraine and was deployed by Russia's Main Intelligence Directorate, or GRU.
It is not clear how much information, if any, the group was able to gather.
A Ukrainian F-16 fighter jet over the skies in an undisclosed location in Ukraine.
AP Photo/Efrem Lukatsky
The SBU said its operation exposed 12 Russian agents and their informants.
Some of them were deserters who had left Ukraine's military and were recruited by Russia while hiding from punishment, it said, adding that they used their contacts, like Ukrainian soldiers in front-line areas, to try to gather intelligence.
Ukraine's Prosecutor's Office said one deceitfully recruited three soldiers he knew by pretending to work for Ukrainian intelligence, Pravda reported.
The SBU said agents who received the information would then go to the area of potential targets to gather extra intelligence.
According to Radio Free Europe, the group's organizer was detained and prominent members were indicted on charges related to state treason and the unauthorized disclosure of military information about the movement and location of Ukrainian forces.
Other members of the group could also face charges, the report said.
The SBU said suspects could face sentences ranging from eight years to life in prison, with their property confiscated.
The F-16s are the most powerful jets in Ukraine's arsenal, making them a major military and propaganda target for Russia.
Ukraine began receiving F-16s this summer, after repeated requests for the planes. Air warfare experts say the jets are a major boost to Ukraine's defenses, helping it protect cities and other targets from Russian drone and missile attacks.
Despite their perceived importance, experts say Ukraine is not receiving enough F-16s to make a major difference, and it can't use them to launch raids or go on the attack unless it gets more.
The F-16s being given to Ukraine are also decades old — and are less powerful than Russia's best jets and the most advanced planes deployed by Ukraine's allies.
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