03 December 2003 00:33
High reserves to protect Russian economy against falling oil prices - top banker
Moscow, 2 December: Russia's economy is protected against an abrupt fall in oil prices and increase in interest
rates on global financial markets by its high foreign exchange reserves, the Central Bank of Russia's First Deputy
Chairman Oleg Vyugin said today at a banking conference organized by the Adam Smith Institute.
An oil price fall by 10 dollars per barrel will incur a budget deficit of 2 per cent, which is
"manageable", he said.
The same price fall would lead to a 5bn-dollar deficit for the balance of payments, which is not a problem, since
Russia has enough reserves, he added.
Meanwhile, if interest rates grow sharply, Russia's banking system could run into problems with liquidity, he
said, adding that in this case, the Central Bank of Russia would continue refinancing Russian banks under higher
rates.
Russian companies are expected to easily overcome these situations due to the accumulated financial reserves.
Earlier today, Vyugin said that Russia's foreign exchange and gold reserves are expected to reach 67bn dollars
by the end of the year, while in 2004, they are seen increasing by 2bn-10bn dollars.
[Prime-TASS news agency] |
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