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  Tuesday, February 25, 2020
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The Russian government will lend $2.5 billion to Svyaz
The Russian government will lend $2.5 billion to Svyaz Bank to stabilize the struggling lender's work and enable it to meet its obligations, a government official said on Monday.

Mikhail Kopeikin, deputy head of the government staff, said the funds would be deposited with state-controlled Vnesheconombank and be used to settle Svyaz Bank's claims and guarantee its debt payments.

On September 23, Vnesheconombank (Bank for Development and Foreign Economic Affairs) stepped in to rescue Svyaz Bank, one of Russia's top 30 banks, and prevent the financial crisis from spreading to other lenders.

In a statement issued on Tuesday, Vnesheconombank said it would purchase 98% of shares in Svyaz Bank, which services the country's telecoms sector.

Amid global financial troubles, Russian stocks plummeted on September 17 to their lowest levels in nearly three years, prompting trading to be suspended for two days on the RTS and MICEX exchanges.

The market rebounded on September 19 after the government took urgent measures to pump billions of dollars into the financial sector to shore up liquidity.

Analysts say problems with liquidity experienced by the Russian banking sector might prompt a wave of bank consolidation, and reduce the number of credit institutions in Russia by a third.


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