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Strategies & Market Trends : Investment in Russia and Eastern Europe -- Ignore unavailable to you. Want to Upgrade?

To: Real Man who wrote (77)	4/27/1998 3:59:00 PM
From: Real Man	Read Replies (2) \| Respond to of 1301

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.