MOSCOW (AP) - Russia's central bank has made another move to shore up the ruble, offering hard currency loans to help companies and banks service their debts.
MOSCOW (AP) — Russia's central bank has made another move to shore up the ruble, offering hard currency loans to help companies and banks service their debts.
The bank said Wednesday it would accept foreign currency debt obligations as collateral against the loans. The hope is that it will provide relief to those who can't tap foreign capital markets to refinance loans because of Western sanctions.
The move is the latest in a series of efforts by the Central Bank to ease the selling pressure on the ruble, which has been one of the world's worst-performing currencies this year as a result of the fall in oil prices and the sanctions imposed on Russia for its involvement in the crisis in Ukraine.
Other measures taken include an increase in the Central Bank's main interest rate to a whopping 17 percent in the hope that it makes holding rubles more attractive for traders.
And in a bid to boost hard currency offering at the markets, the government has encouraged major companies to sell more hard currency. On Tuesday, it formally instructed five of the country's biggest state-controlled exporters to reduce their foreign currency assets to October levels and to not raise them again until March.
Though the ruble has lost about half of its value this year, there are signs that it has recovered its poise over the past few trading sessions. Having fallen to a historic low of around 80 to the dollar last week, it has rebounded to the 55 mark.
However the ruble performs over the coming days and weeks, the Russian economy is predicted to fall into recession next year. Some, like ex-Finance Minister Alexei Kudrin, are warning of a full-blown crisis.
On Tuesday, credit rating agency Standard & Poor's put the country on notice that it may face a downgrade following "a rapid deterioration of Russia's monetary flexibility and the impact of the weakening economy on its financial system."
S&P said it plans to make an announcement by mid-January. Any cut from the current BBB- would push Russia's debt rating into so-called "junk" status.