The Value of the Russian Filing Dollar
The Financial Times newspaper reported on the acquisition of UFA by a Russian lender. This is the largest deal made by a private sports betting bank in a decade. It also marks a significant expansion of a business that had traditionally focused on higher risk gambling on European and American sporting events. The purchase of UFA by the Higher School Football Association (HSFA) is part of an extensive nationwide expansion drive by the global sports betting industry. The acquisition of UFA by a Russian lender is therefore another example of an increasing trend towards offshore gambling activities.
The Financial Times reported that the sale of UFA by its former creditors to a Russian lender will mark a turning point in the growth of ufa, which until recently had been dominated by the west. The strong financial position of ufa, its healthy budget and low debt service were key drivers for the positive outlook change, according to the report. The region of Bashkorton, home to the national football association of Russia, is now on the verge of joining the global club. The main business center of Ufa, a city within the Moscow Oblast area, has a population of more than seven million people, according to the recent census.
The sale of UFA to a state-owned bank is expected to increase the number of people transacting on the virtual market for Russian rubles. This would be a welcome boost for those wishing to convert rubles into trouble or other currency. In addition to the financial benefits, the increase in transaction traffic may stimulate investment opportunities in the city center. The president hotel in Ufa is also in the city center, and is a highly visited attraction for those who wish to spend a few days in town.
Although the sale of UFA to a state-owned bank is a positive for both the local economy and for investors, the future of ufa as a global currency may still remain uncertain. The government of rubles is yet to fully acknowledge the importance of the country’s economy in terms of trade. The country’s economy is largely dependent on gas and oil exports. The slowdown of these export industries could have a severe negative impact on the strength of the ruble. Meanwhile, the political situation in ufa is uncertain, with the government refusing to acknowledge the need for developmental financial instruments.
In addition to the potential impact of economic conditions on ufa, the political developments in the country could also impact the value of the convertible currency. After the dissolution of the Soviet Union, many of its cities witnessed a rapid urbanization and rapid influx of both tourists and inhabitants from the former Soviet Union. Tourists started to patronize the new cities, spurring the economy of Bashkortostan and other cities with heavy infrastructure investments, such as Moscow and others. Meanwhile, many officials from the Republic of Bashkortostan (rural areas) were permitted to travel abroad, taking their salaries with them, resulting in a sharp decline in salaries paid to residents of the cities.
Both the decline in tourism and rapid urbanization have resulted in a dwindling economy in the capital city of ufa. A significant fall in GDP per capita could weaken the ruble’s exchange rate against the US dollar. Though analysts are watching the situation carefully, they do not see any immediate threat to ufa’s ranking. According to traders and experts, a fundamental problem lies in the fact that the collapse of the Soviet Union was accompanied by a rapid growth in tourism, which was then supported by the federal budget. The recent turmoil in the country, which resulted in the ousting of the ruling Party of Regions (Poroslova) and prime minister Alexy Chirac’s resignation as French president, may have impacted negatively on tourism in ufa, but analysts believe the situation will be short-lived.