Deputy chairman of the Russian Central Bank Alexey Ulyukaev
Photo: Alexey Kudenko
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Crisis Brings Refinancing into Focus
The Federal Customs Service reported yesterday that the trade balance surplus of the Russian Federation shrank by 17 percent between January and August to $95.9 billion. No influx of foreign capital is expected before the end of the year, stated deputy chairman of the Central bank Alexey Ulyukaev, and so the Bank is prepared to replace up to 1.5 trillion rubles through refinancing. He did not specify where that money would come from. Economists say that, because of the problems expected in the banking system before the end of this year, the Central bank will make refinancing one of the main instruments of monetary policy.
In addition to the outflow of capital from Russia and the problems of Russian banks obtaining credit abroad, another symptom of the world financial crisis has been the steady shrinking of the foreign trade surplus. That combination of factors will bring the Russian economy to a “new stage of development,” analysts say.
Even the 1.5 trillion rubles promised by Ulyukaev may not be enough to cover the deficit of liquidity on the market or to keep interest rates under control, say most economists. Deputy Prime Minister Alexey Kudrin mentioned at the government meeting on October 8 that money earmarked for the state corporations may be temporarily used to fight the effects of the crisis. The situation may also help the Central Bank influence interest rates and move them toward the 4-5-percent mark.
www.kommersant.com
All the Article in Russian as of Oct. 10, 2007
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