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Central Bank head Sergei Ignatyev has told newsmen that the banking problems have smoothed out
He cited 18 billion rubles ($1 equals 29.23 rubles) worth of deposits in banks (excluding the Savings Bank) and 20 billion rubles in the Savings Bank, made by individuals from August 1 to 15. This update with contribution from 140 banks indicates that a pertinent increment over the same period last year was lower. In his opinion, the banking market at the acme of the crisis was relieved due to the July downing of obligatory reservation rates from 7 to 3.5 percent. Mr. Ignatyev sees no prospects for the eruption of a systemic banking crisis before the end of the year. Admitting however that some banks might find themselves in a spot, he did not identify them. "We revoked 25 licenses in 2003, but this year there will be fewer," he said. Sergey Ignatyev said that the Central Bank would pay off up to 100,000 rubles to each depositor whose lending institution went bankrupt during the crisis. Meanwhile, Finance Minister Alexei Kudrin said at a government session this Thursday that the Central Bank should not act as an ultimate creditor in case of banks' insolvency. "I think it is a dangerous tendency reducing the banks' responsibility and the responsibility of clients opting for these banks," noted Mr. Kudrin. The Central Bank head asserted today that the version of depositors' defection from commercial banks to the Savings Bank during the crisis had not justified itself. "Over a month and a half from June 15 to August 1, individuals' deposits in banks went down by 30 billion rubles, or four percent while the Savings Bank saw an increment of merely 10 billion rubles, or one percent." Mr. Ignatyev also specified certain economic indicators. Inflation over the first seven months of 2004 made 7.1 percent in comparison with 8.7 percent over the same period last year. But what makes one worry is the base inflation rate (which excludes short-time price fluctuations under the impact of certain administrative factors, force majeure and seasonal events). Its slight decline from 5.4 percent over the first seven months in 2003 to 5.1 percent this year, said Mr. Ignatyev, is explained, among other things, by the relatively high growth rate of consumer prices on bread following a scarce harvest last year. He believes the harvest will be higher this year and the bread price rise will slow down. The Central Bank head assured reporters that the consolidation of the ruble's real effective exchange rate would not exceed seven percent this year. This figure made five percent over the seven months this year, added Mr. Ignatyev. The Central Bank shares on the whole the position of the ministry for economic development and trade on social and economic estimates for 2005, with the exception for inflation forecast. The central bank suggests the price-rise corridor in 2005 standing between 7.5 percent and 8.5 percent while the ministry's estimate is 8-9 percent.
Print Central Bank head Sergei Ignatyev has told newsmen that the banking problems have smoothed out Bookmark Central Bank head Sergei Ignatyev has told newsmen that the banking problems have smoothed out

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