I guess, the market did not notice this ...
MOSCOW, April 27 (AFP) - Russia's chief priority is to cut
punitive interest rates in half by year's end and lower the cost of
borrowing to stimulate economic activity and growth, acting First
Deputy Premier Boris Nemtsov said Monday.
Nemtsov told a congress of Russian bankers that base rates,
currently at 30 percent, should be cut to 16 percent by the end of
the year, Interfax reported.
Economists have stressed that Russia's high interest rates,
introduced in January to protect the ruble and lure investors in the
wake of the Asian financial crisis, are now punishing the economy as
borrowing is virtually prohibitive.
Nemtsov added that bankers should support small- and
medium-sized companies with credits to create a wider base of
enterprises in Russia.
"We understand how little incentive there is in crediting small
businesses -- much work to be done and high risks to counter,"
Nemtsov was quoted as saying by Interfax. "But if we don't do this,
we shall not create a middle class in Russia."
Russia's central bank chief Sergei Dubinin told the same forum
Monday that 25 percent of all Russian banks are in serious trouble,
though they own only five percent of all assets of the Russian
banking system.
Dubinin said some of these banks had lost more than their
original charter capital and thus were unlikely to pull through.
Russia's markets are closely watching to see what role if any
Nemtsov, a pioneering reformer, is accorded in the cabinet of Prime
Minister Sergei Kiriyenko, due to be announced this week.
Nemtsov, a close Kiriyenko ally, is considered one of the main
champions of reform still in the government, particularly following
the ouster of Anatoly Chubais last month. |
