World Economy

Russia May Stop Privatization as Economy Improves

Russia May Stop Privatization as Economy ImprovesRussia May Stop Privatization as Economy Improves

Russia’s improving economy has removed the main impetus for privatizations planned for this year, allowing policymakers who always doubted the wisdom of selling state assets to regain the upper hand, according to interviews with multiple officials, Reuters reported. Russia’s Finance Ministry initially planned to raise 138 billion rubles ($2.39 billion) from privatization this year, mainly from selling a stake in the shipping company Sovcomflot and reducing its holdings further in VTB, the country’s no. 2 bank. Meanwhile, the Russian central bank cut its key rate to 8.25% from 8.5% on Friday and said further cuts were likely in coming months. Friday’s cut was in line with market expectations. Sixteen of 20 analysts and economists polled by Reuters had predicted the central bank would lower its key rate by 25 basis points. The central bank said it would consider cutting the key rate further as inflation has slipped below its 4% target to 2.7% in annual terms as of Oct. 23.

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