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The budget policy should be made tougher
The budget policy should be made tougher, believes Alexei Ulyukaev, first deputy chairman of the Central Bank of the Russian Federation. "This year and in the three-year cycle the budget policy should be tougher than now", Ulyukaev told the Russian Economic Forum in London. He recalled that the government earlier fixed a level for non-interest expenses not to exceed 12 to 12.5 percent of the gross domestic product. "Now we are having 15 percent and pondering the possibility of increasing public expenditure", he said. Ulyukaev proposes, instead of increasing public expenses, to encourage private investments in the economy. "Investing three budget rubles we lose ten rubles of private investments. In this way, we cannot attain economic growth", he noted. "Towards these ends, it is much more expedient and efficient to make use of commercial banks. They will, in turn, make use of the Central Bank refunding", he continued. He said that the Central Bank is broadening the possibility of bank refunding. In particular, the Central Bank is going to expand the lombard list and offer refunding against customary pledges - corporative bonds, bills and credit portfolios with sustained risks. "But, all this will operate only without excessive liquidity and pumping money into the economy", Ulyukaev explained. To him, at a time when the cut-off price of oil increases in shaping the Stabilization Fund, the Central Bank will again have to use the mechanisms of sterilization of money supply and neglect those of economic crediting.
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