'Russia will not face another collapse'

[Black Stone]

'Russia will not face another collapse'

Moscow says it will exhaust 'all means' to avoid inflation hikes and a fall in the value of the ruble against foreign currencies.

In an address to a convention of his United Russia party, Russian Prime Minister Vladimir Putin said Russia has built up significant financial reserves which give the country 'a wide margin of maneuver'.

They allow us to preserve macroecomic stability and prevent a spike in inflation or a sharp change in the ruble exchange rate, Putin added.

"For this we will use all means at our disposal," he said.

The premier's comments come a day after Russia's central bank president, Sergei Ignatiev, said the bank needed to spend 57.5 billion dollars in September and October to prop up the Russian currency.

The former president assured the government would not let the escalating global economic crisis lead to another financial 'collapse' in Russia.

"We will do everything that depends on us so that the problems of past years, the collapses of past years, will not be repeated in our country," he said.

In 1991, Russia suffered financial collapses following its disintegration and defaulted on debt in 1998.

Putin also announced Moscow's decision to give one billion dollars (785 million euros) to the International Monetary Fund (IMF) to help countries tackle the global financial crisis.

Russia will also offer credits to China and India to buy Russian goods and will lend neighboring Belarus two billion dollars (1.6 billion euros) to cope with the crisis, he added.

 

[daredevil]

Looks like Russians are scr**ed with oil price <$50. IIRC, they have asked for a big loan from China.

 

[Black Stone]

Looks like Russians are scr**ed with oil price <$50. IIRC, they have asked for a big loan from China.

The collapse of the Soviet Union and what comes after it was a humiliation to the Russians. Once a superpower and now a lesser power. Many still have bad feelings about it.

Therefore, they are really scared should another major event happen again.

 

[daredevil]

I think they were pinning a lot of hopes on Oil to make a come back as a counter weight to USA. But, now it seems they have to wait for a little more time.

 

[Black Stone]

I think they were pinning a lot of hopes on Oil to make a come back as a counter weight to USA. But, now it seems they have to wait for a little more time.

The Russian economy is heavily based on the export of resources, mainly oil and gas. The other major export is military hardware, but one can sell so many at one time.

The reliance would go on the resources and since the outlook of the world economy is not good and the fall of resource prices. The Russians has a reason to be scared.

Unlike the US and China where their economy are diverse, if the two main export comes to a halt, they would be in deep trouble.