Nabiullina: no banking sector liquidity shortage
MOSCOW. June 20 (Interfax) - The Central Bank of Russia is supporting liquidity in the banking sector at the level needed to maintain interest rates on the money market, Central Bank Chairman Elvira Nabiullina said in the State Duma on Friday.
"We do not currently have a liquidity shortage on the market. After the crisis, a state-of-the-art mechanism for refinancing commercial banks was created. We are providing as much liquidity as is needed to maintain money market interest rates in order to effectively manage fiscal policy," she said.
Nabiullina acknowledged that the economy is currently experiencing a shortfall of long money, so unconventional approaches are being applied to finance investment projects. In particular, this is the program to refinance investment projects that Russian companies - end borrowers in Russia - plan to implement on a project financing basis, she said.
Under this program, banks will receive refinancing from the Central Bank to lend to the investment projects at an interest rate equal to the Central Bank key rate minus one percentage point. The bank that receives the refinancing must have capital of at least 50 billion rubles and be in the first or second bank category under the Central Bank classification.
"We are beginning at 50 billion rubles. Further on we will look at how this affects the direction of fiscal policy overall and make a decision on possibly expanding, fine tuning this instrument. We are assuming that these will be mega-projects, projects aimed at modernizing the economy, new projects in new technologies, new production capacity," Nabiullina said.
