07.06.09

The situation in Russia is better than expected although problems remain with mounting debt on loans, CB Chairman Sergei Ignatyev said at a meeting with President Dmitry Medvedev in the Kremlin.

"The situation is stabilizing, it's better than we expected a few months ago," Ignatyev said.

"Although problems remain, mostly those created by the global economic crisis, and the main problem that we are addressing in a big way right now is growth in past-due debt to the banking system on the part of real sector enterprises," he said.

"Of course the situation is not straightforward, and we're monitoring it closely," he said. A number of the measures planned by the government and CB are being implemented with this in mind. They include providing subordinated loans and possibly supplementary capital with the help of Federal Loan Bonds (OFZ). "This instrument might be needed, it might not, it will depend on the situation," Ignatyev said.

"This list is not exhaustive." "We'll thinking more on possible measures of support for the banking sector and the real sector alike," he said.

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Source: Interfax