In an effort to inject cash into the ailing Russian economy, the Kremlin announced a sale of a 19.5% stake in the state-owned Rosneft. The large privatization deal propped up the feeble Russian ruble.
On the back of Western economic sanctions against Russia, Rosneft was struggling to find a buyer despite obvious profitability of the deal. Therefore, those bidders, who ventured into this project despite dominating anti-Moscow stance, made a good bargain. As a result, commodities trader Glencore and Qatar's sovereign wealth fund bought together a 19.5% stake in Russian oil giant Rosneft. The deal is worth $11.3 billion. "It is the largest privatization deal, the largest sale and acquisition in the global oil and gas sector in 2016," President Vladimir Putin said in a televised address.
In response to the sale, the Russian ruble strengthened immediately against the euro and the US dollar. The Bank of Russia and finance ministry are closely monitoring forex moves to make sure the currency market is not disrupted when the money from foreign investors are converted into rubles. Besides, oil prices also extended the rally amid statements of the Russian authorities on the successful sale.
