The Financial Times profiles a recent proposal made by Russian Prime Minister Dmitry Medvedev to formulate yearly budgets every year as opposed to the traditional three years. The government’s official reasoning is that fluctuating oil prices make economic planning difficult. The real reason, according to the FT is that Russia is concerned about a looming hike in US interest rates by the Federal Reserve. The expected result of the interest rate hike is expected to lead to a more valuable dollar. This is problematic for Russia as it would make it even more difficult to rebuild its foreign reserves.

Due to its current economic troubles, Russia has already used up more than $130 billion of its $500 billion in foreign reserves in order to slow the devaluation of the ruble, which has lost significant value vis-à-vis the dollar over the past eight months. While some expect a higher USD interest rate to have significant adverse effects on the Russian economy, an analyst from Moscow-based Renaissance Capital indicated that a boost in interest rates may lead to more minor consequences such as higher capital outflow and a “little bit more pressure” on the ruble. The US Federal Reserve has not indicated when it will issue interest rate hikes although a decision is expected in the near future.

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News Briefs:

• The Armenian presidency announced that it will receive a $200 million loan from Russia after Armenian President Serzh Sarkisian visited the country last week. The president also stated that the country secured a discount on natural gas and will now pay $25 less per cubic meter. The loan is expected to assist in modernizing the Armenian ministry.

• A source close to the Iranian energy ministry indicated that three foreign companies are interested in purchasing an Iranian LNG plant that has fallen into disuse. The companies, Chinese, “Arabian” and European, are looking to invest the necessary funds to bring the plant back into operations once the Iranian economy is unencumbered by sanctions. Work on the project is expected to take around two years to complete.

• EurasiaNet profiles an emerging scandal relating to a renowned avant-garde art gallery in western Uzbekistan. Uzbek art collector and curator Marinika Babanazarova stands accused of forging paintings from the gallery in order to sell the originals from profit. The charges are however believe to be trumped up in order to wrest control of the gallery from Babanazarova, who has managed it since 1984 when its creator, Igor Savitsky, passed away. Babanazarova has been dismissed from her duties at the gallery despite widespread public outcry to reinstate her.

• Russia has requested that Bulgaria explain why it has repeatedly rejected Russian requests to fly over its airspace in route to Syria. One Russian deputy foreign minister insisted that if Bulgaria has doubts as to Russia’s intentions he should simply inquire as to the purpose. Bulgaria has rejected Russian requests to fly over its airspace due to what the Bulgarian foreign ministry characterized as “serious doubts about the cargo of the planes.”

• Tajikistan has arrested seven more member of an alleged anti-government movement under the command of fugitive Deputy Defense Minister Abdukhalim Nazarzoda. The arrests were made following a confrontation between Tajik security services and members of the armed group in which one of its members was killed. Tajik military sources now claim to have killed 18 opposition fighters and detained 70 others. Nazarzoda’s whereabouts are still unknown.