Russia’s central bank is working out new measures to provide foreign-currency financing for banks, as Western sanctions over the Ukraine crisis keep dollars in short supply.
Central bank governor Elvira Nabiullina said on Thursday that in the coming weeks the bank plans to introduce repo facilities under which it would lend dollars to banks for terms of seven and 28 days.
The new scheme is the first time the central bank has offered a foreign-currency repo. Its use underscores the authorities’ concern as Western sanctions restrict Russian corporate access to foreign financing, creating a shortfall of dollars that has helped push the value of the rouble to record lows.
The dearth of dollars is especially problematic because company debt repayments are due to spike, with some $50 billion falling due before the end of 2014.
Analysts said that the new repo facilities would help mitigate the immediate squeeze, but that more support measures may be needed in future if Western sanctions continue.
VTB Capital analyst Maxim Korovin said that he foresaw banks needing to borrow some $5 billion to $10 billion in the short term, an amount that should be well-covered by the new facility.
“Basically, the central bank is offering itself as a substitute for foreign banks,” he said.
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