Nabiullina: CB to provide banks with more liquidity due to foreign financing problems
MOSCOW. April 2 (Interfax) - Russia's Central Bank will expand liquidity provided to Russian banks due to problems with foreign financing, Central Bank Chairman Elvira Nabiullina said at an Association of Russian Banks (ARB) congress.
"We understand the influence our decision could have on increasing rates. We are going forward with implementing a new tool that will allow [us] to refinance banks' secured investment loans for a longer term. This is alongside expanding experimentation and broadening loan refinancing for small and medium business," she said.
Political risks are significant now, and they will be particularly relevant if Russian banks and companies encounter limitations for refinancing on western markets, Nabiullina said, adding that this is also true if rating outlooks are reviewed and changed, or if the ratings themselves change. "This could negatively reflect on financial stability," she said.
"We in the Central Bank are now looking at how we can react to this, including from the standpoint of providing liquidity if need be," Nabiullina said.
