Russia's Agriculture Ministry expects additional funds for preferential lending owing to CBR's rate hike

ST. PETERSBURG. Sept 19 (Interfax) - Russia's Agriculture Ministry is expecting additional funds in order to subsidize preferential lending owing to the Central Bank of Russia having recently hiked the key rate, First Deputy Agriculture Minister Yelena Fastova told Interfax in St. Petersburg on Thursday.

"Additional funds will be needed, and the need has been assessed. We have appealed to the Finance Ministry, and we are waiting for the additional funds to be allocated," Fastova said.

Fastova recalled that the budget this year has allocated 209 billion rubles to subsidize preferential loans, with 28 billion rubles for new short-term loans.

"We will fulfill all accepted obligations [for subsidized loans]," Fastova said.

As reported, the 2023 budget envisages allocating 201 billion rubles in order to support preferential lending.

The overall volume of concluded loan agreements in the industry totals about 1.2 trillion rubles annually.

Owing to growth in the key rate, the Agriculture Ministry has implemented the so-called floating rate on preferential loans that is tied to the Central Bank's rate. The ministry has developed a special scale for determining the rate and has identified several priority areas for which the rate on preferential loans will be lower than for other industries. The areas of priority include breeding programs, genetics, horticulture, dairy farming, poultry farming, the bakery and flour-milling industry, and several other industries.

The CBR hiked the key rate 100 basis points from 18% per annum to 19% pa last Friday.