No need for Russia to cut off from foreign investment: Putin

27/05/2015 00:58 AST

Russian President Vladimir Putin said on Tuesday the country should not cut itself of from foreign investment and technologies.

“We should not, on any account, cut ourselves off” from the kind of foreign investment and technology that can drive economic growth, Putin told a conference of business people.

After annexing Ukraine’s Crimea region in March 2014, Russia was hit with Western sanctions that limited its access to foreign capital and technologies, especially for the banking, energy and defence sectors. Russia imposed retaliatory sanctions.

The Russian government has cut its budget for the 2018 World Cup by more than $70 million.

When Russia won the bid to host the event, its economy was booming. But under the pressure of Western sanctions and low oil prices, the economy has suffered over the past year and concerns are high about the financial burden of the World Cup.

The government website says the budget will be cut by 3.6 billion rubles ($71 million) to 660.5 billion rubles ($13.2 billion). The savings is to come from lowering expenditures of electrical-infrastructure improvements connected with the competition.

Last week, Russian authorities said they wanted to use prisoner labour to help prepare for the World Cup.

Meanwhile, the Russian rouble retreated on Tuesday as the US dollar surged on global markets, oil prices slid, and the need for roubles to pay monthly taxes waned.

At 1450 GMT, the rouble was 1.2 per cent weaker against the dollar at 50.58 and down 0.4 per cent to 54.82 versus the euro.

The rouble’s weakness “is largely the result of the situation on the global forex market. Expectations of an increase in the U.S. Fed’s rates have provoked a firming of the dollar on all fronts,” TeleTrade analyst Alexander Egorov said in a note.

The dollar was 1.2 percent stronger against a basket of major currencies on Tuesday, benefiting from comments on Friday by Federal Reserve Chair Janet Yellen that “it will be appropriate” to raise rates this year if the US economy continues to improve.

Agencies