Central Bank views... And look in the last paragraph to see why
the Russian market is falling.
KIEV, May 11 (Reuters) - Russian domestic treasury yields
should ease this year, based on increasing foreign capital
inflows and a traditional summer rise in prices, central bank
First Deputy Chairman Andrei Kozlov said on Monday.
"I would like to see them on the level of 20 percent in four
or five months -- but this is my personal wish," he told
reporters on the sidelines of the European Bank for
Reconstruction and Development's annual meeting in Ukraine.
His colleague, central bank deputy chairman Alexander
Potemkin, had said on Sunday the bank expected no significant
moves from 32-33 percent for the next several months.
Both men said foreign holdings of Russian domestic debt had
recovered and risen above levels before the Asia crisis, which
caused widespread foreign flight from the market.
Kozlov said foreigners now bought about 35 percent of
primary rouble-denominated issues and accounted for 40 percent
of the secondary market, holding about 119 billion roubles ($19
billion) of the market, against about 115 billion before the
Asia crisis and a low of 90 billion.
Foreign confidence was also reflected in foreigners
gradually extending the maturity of their holdings, which
generally increases risk and often decreases liquidity.
"Once again the longer-term holdings of foreign investors is
growing," he said. "It is about 22 percent."
KIEV, May 11 (Reuters) - Russia's economy, burdened by high
interest rates, faces no immediate financial threat but must
bring mounting government debt under control, central bank
chairman Sergei Dubinin said in an interview on Monday.
He said Russia faced a zero balance of payments and trade
balance this year. Treasury bill rates could drop to around 20
percent by autumn. Russia's foreign currency and gold reserves
were about $16 billion, he said on the fringes of the European
Bank for Reconstruction and Development's annual meeting.
"Nothing threatens us in three months -- debt will be
serviced and everything will be fine. In four months, there is
no threat," he said. "But if we do not take measures to
stabilise state debt, the level of service payments will grow."
Russia plans to decrease debt issues from planned levels
this year. Dubinin said this should help cut treasury bill rates
to around 20 percent in about five months.
"We will go back to pre-crisis levels in autumn," he added
in English, speaking to Reuters Television. World market turmoil
would have an effect on Russia's economy.
"It appears that at the end of the year the trade balance
and balance of payments will be zero," he said in Russian. "The
situation is not good. It is linked to the falling price of oil.
We export the same amount of oil and get less money." |
