Selective but effective bailout

Author: | Published: 1 Dec 2008

In the wake of the global financial crisis, the Russian economy faces serious challenges such as currency fluctuations (including downward pressure on the rouble), a dramatic drop in the value of the Russian Trading System (RTS) by approximately 75% between May 19 and November 19 2008 and a fall in the oil price from $140 a barrel to approximately $46 (as at November 14, according to Vedomosti).

Just too much debt According to the Central Bank of Russia (CBR), in the first half of 2008 Russia's external debt increased by approximately 13.7%. On July 1 2008 it exceeded $527 billion, of which the external debt of Russian companies and banks amounted to $488.3 billion. During the same period, the proportion of external debt owed by banks increased from 25.3% to 36.6% of the total. Between now and the end of 2009 approximately $210 billion of Russian private sector debt is scheduled...