Russia will start pumping more than $80 billion into Russian banks early next week to help ease a growing credit crunch, the finance minister said Thursday.
Under the government plan, national development bank VEB is to receive $50 billion to be dispersed to companies and banks to help them pay off foreign debt.
The banking sector is also to get $36.3 billion in long-term loans, chiefly via state-owned Sberbank, VTB and agriculture lender Rosselkhozbank.
Some of Russia”s biggest companies are bidding for a share of the government funding, but there will not be enough for everyone. VEB”s chairman said earlier this week the bank has already received applications for more than the $50 billion.
President Dmitry Medvedev on Thursday suggested special consideration would be given to Russia”s construction, retail, agriculture and machinery industries — among those hit hardest by the crisis — describing them as crucial for maintaining economic growth.
Speaking to ministers and bankers gathered at his residence outside Moscow, Medvedev said the relief package was aimed at making sure Russia”s “efficient enterprises and private entrepreneurs” don”t suffer because of the financial crisis.
But given a lack of clear criteria for disbursing the refinancing funds, market analysts say they expect those companies with the best political connections to come out ahead.
