Fearing Chaos From The Eurozone, Russia Injects Its Banks With Cash

vladimir putin

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The Russian Finance Ministry is ready to inject 160 billion rubles ($5.4 billion) into the country’s banks to maintain liquidity, reports Ria Novosti.Via Ria Novosti:

Russia’s Finance Ministry and Central Bank have taken precautionary measures due to the considerable amount of liquidity which has left the domestic market through the purchase of foreign exchange, VTB Capital Nikolai Petrov told the paper.

The Russian stock market slumped on Monday and Tuesday and the ruble has been depreciating amid global economic chaos caused by the Eurozone debt crises and Standard & Poor’s downgrade of U.S. debt. The Finance Ministry placed 40 billion rubles, or more than 1.3 billion U.S. dollars, in bonds on the Moscow market on Tuesday, but said that additional measures might be taken.

Via Interfax:

“We in Russia think it necessary to follow liquidity carefully. The Finance Ministry and Central Bank are monitoring the situation. If needed, then by various channels the Central Bank and Finance Ministry will add the necessary volume of liquidity,” Russian Prime Minister Vladimir Putin said on Tuesday.

The Finance Ministry has been putting federal funds into domestic banks to help keep them liquid since the global financial system crashed in 2008.