AFP, Moscow :
Russia’s central bank chief insisted Monday that the country’s beleaguered banking system is out of danger after being battered by the economic crisis rocking the country. “The situation in the banking system is by and large a mirror for what is happening in the economy,” bank head Elvira Nabiullina told President Vladimir Putin at a meeting.
“Of course, external events have had an impact on the development of the banking system. But in general, indicators show that it is in a safe place, that the banking system is stable.”
Russia entered its worst financial crisis of Putin’s 15-year rule in December as plummeting oil prices and Western sanctions over the conflict in Ukraine sent the economy into a nosedive.
A sharp plunge in the ruble spurred Russians to withdraw funds for conversion into foreign currencies, and threw huge corporate debt repayments into doubt.
The central bank hiked interest rates sharply to curb the ruble’s fall, stifling new lending and ramping up the rate of unpaid debts.
Authorities were then forced to close down dozens of banks judged to be too fragile, while major lenders suffered losses or eroded profits. Nabiullina said that after several months of losses the banking sector as a whole had returned profits of some 51 billion rubles ($794 million, 724 million euros) in the first half of 2015.
