Putin rules out state control of Russian economy

October 30th, 2008 - 3:38 pm ICT by IANS  

Novo-Ogaryovo (Russia), Oct 30 (RIA Novosti) Russian Prime Minister Vladimir Putin has ruled out state controls of the economy in the wake of the ongoing credit crisis, adding that government intervention was only a temporary step.”I would like to stress that imposing state controls on Russia’s economy is not, cannot be, and will not be our task. Increasing the state’s presence in the economy is a forced measure and is temporary,” Putin told an economic conference Wednesday.

Putin said supporting the financial system and the real estate sector of the economy demanded significant budget expenditure which needed to be appropriate considering the scale of the problems.

“Half measures will not bring the desired result,” the premier said.

Russia has been hard-hit by the global credit crisis, which has toppled Western banks and pushed developed economies toward recession. The country’s stock markets have lost around two thirds of their value since their May highpoints, amid declining oil prices and low investor confidence.

Russia’s government and the central bank have recently taken urgent measures to pump billions of US dollars into the domestic stock market to shore up the liquidity of leading market players.

The central bank has also granted $50 billion in loans to companies and banks through the country’s national development vehicle, Vnesheconombank, to help them refinance their foreign liabilities.

Since Oct 20, the central bank has held unsecured loan auctions for a large group of Russian banks to help the domestic banking system cope with the liquidity crisis.

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