21 June 2004 18:15
Russian stock exchange unstable says economics minister
Changes in the government have led to instability on the stock exchange, Russia's economic development minister
said at a meeting with Vladimir Putin on 21 June.
"There is instability on the stock market, despite the fact that the interbank market levelled out last
week," ITAR-TASS quoted Economic Development and Trade Minister German Gref as saying at the meeting between
ministers and the president. Gref said recent changes to the government were one of the reasons for this instability,
adding that "rhythm has to be restored in budget financing, and the relevant documents must be adopted following
the entering into force of the law on currency regulation".
In a separate report, ITAR-TASS quoted the head of the Federal Service for the Financial Markets, Oleg Vyugin,
denying there was any crisis in the Russian stock exchange. Vyugin was speaking on 21 June at a round table discussion
devoted to legislative provision for the stock exchange.
He said that between the end of April and the beginning of June the Russian stock exchange lost about 30 per cent of
its capital, and that the Central Bank's policy on the rouble rate and the events surrounding the Yukos oil company
had affected the market. But he said he was categorically against state intervention and the round table's proposal
that crisis measures be introduced to stabilize the stock exchange. "The stock exchange should be allowed to
breathe freely", ITAR-TASS quoted him as saying.
Ministers attending the meeting with Putin went on to discuss the law on currency regulation. Finance Minister
Aleksey Kudrin predicted that it will be "a step towards Russia entering the world currency system and a serious
move towards convertibility of the Russian rouble", but warned that, after it goes into force, "Russia's
dependence on events on the world market will increase". "Immunity must therefore be developed so that
negative events do not impinge on Russia's interests," Kudrin said.
He said that, as one "necessary measure", the Central Bank should be given the right to impose certain
restrictions over two years. After that period, he told the president, the restrictions will be cancelled "and you
will have completely free movement of capital". "The Central Bank will work out what it is going to do on this
matter in the nearest future," Kudrin said, "but specific measures will depend on the market situation and the
movement of speculative capital".
Economic indicators were also discussed at the meeting with Putin. Gref said GDP increased in May by 0.5 per cent
compared with April, and that industrial production between January and May 2004 was up by 7.3 per cent on the same
period last year. He said fast investment growth had resumed and that "given this pace it will be higher than 12
per cent by the end of the year".
Overall, Gref said, the economic situation in May was "not bad", but agricultural production continued to
decline, though this did not affect the food industry, he told the president. There was a drop in car manufacturing, he
said.
[ITAR-TASS news agency] |
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