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Russia Adopts Anti-Crisis Plan

Russia Adopts Anti-Crisis PlanRussia Adopts Anti-Crisis Plan

The Russian government has adopted a plan of anti-crisis measures and is ready for any turn of events, presidential aide Andrey Belousov said.

“Of course, the government will take measures (to tackle the financial crisis),” Belousov said without giving details of the plan, Itar Tass reported.

The measures will be introduced depending on how the situation is changing and concern the recapitalization of banks, as well as detailing a list of strategic enterprises and the work with them if this is needed.

Belousov, Russia’s former economic development minister, said he is optimistic about the ruble.

In an attempt to limit the ruble depreciation, the Central Bank decided to raise its key interest rate to 17% from 10.5% on Tuesday. The Russian ruble strengthened by Tuesday evening after plunging to record lows against the euro and the dollar.

“Now the most acute situation is not related to the ruble. The measures which were adopted will either lead in the near future or I think, have already led to the stabilization of the ruble,” he said.

“Most likely, all of us will see in the coming days that the trend will develop,” Belousov said. The government has already adopted several important decisions, including providing up to 1 trillion rubles ($16 billion) in additional capital to support the banking sector and increasing in insurance on deposits of up to 1.4 million rubles ($23,200).

The Kremlin aide also said it is important not to allow the situation over liquidity constraints to turn into the crisis of the ruble liquidity. Belousov also believes that the Bank of Russia should lower the key rate from the current 17% as soon as the situation allows this.

  Revising Budget

The government is ready to revise the federal budget if this is needed, Russian Deputy Prime Minister Sergey Prikhodko said.

“We will have to work on the implementation of the federal budget. We will see how the economic situation develops and if there is need of introducing particular changes,” Prikhodko said.

Russian Prime Minister Dmitry Medvedev last week said the country’s federal budget for 2015 could be revised due to unfavorable international and domestic economic developments.

Some expert calculations show that with the oil price fall by $3 per barrel, the Russian currency has to be devalued by 1 ruble.

 

Financialtribune.com