Russian Government Rescue Plan Extended Over the Weekend
Posted on Monday, September 22nd, 2008 | In RussiaOver at Russia Economy Watch Edward Hugh has posted on the Russia Economy plan where the financial ministry increased its funding provision for the Russian banking system on Sunday. )See post here)
As the article reports, the latest increase in help for Russia economy suggests that providing an additional $130 billion of liquidity to Russia’s financial markets, which are still under great pressure from recent investor drop off.
Also under the latest plan for Russia economy, the number of banks who would be entitled to the funding boost has been increased from 3 to 28. During first drafts of the plan, the funding assistance was to be restricted to only the nations’ three largest banks, VTB, Sberbank and Gazprombank. This increase in availability of funds is intended to more thoroughly reinvigorate Russia economy.
The Russian finance ministry also claimed it will provide an extra $24.21 billion in the form on credit for three months with a minimum rate of 8.75%. The funding, geared to boost Russia economy in general, is to be auctioned today.
Alexi Kudrin, Russia’s finance minister, met with more than 20 Russian banks yesterday. It is said that these representatives had been pushing for such a measure since early last week, and feel that such actions are desperately needed to aid Russia economy in this transitional time.
Naturally, a major concern for Russia economy, as in any situation when funds are injected into a nation’s commercial banks, is that they may prove to be inflationary. Only time will tell if the flood of funds will be supported by ongoing industry growth and development.
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Alexi Kudrin, Edward Hugh, finance, finance ministry, Gazprombank, Russia, Russia, russia economy, Sberbank, USD, VTB
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