Russia Is Bailing Out Its First Bank Of The Ruble Crisis

Russia rubleREUTERS/Maxim ZmeyevA board showing currency exchange rates in Moscow on Tuesday.

Russia’s central bank said it would provide a mid-size bank with up to 30 billion rubles ($US530 million) to stop it from going bankrupt, in the first bailout of its kind during the country’s ruble crisis.

The central bank’s Deposit Insurance Agency, responsible for managing crisis-hit lenders, would also take over supervision of Trust Bank as of Monday, it said in a statement.

The ruble has dropped about 45% against the dollar this year, suffering particularly steep falls early last week. President Vladimir Putin has declined to call it a crisis and said the currency would eventually rise again. 

Ruble to dollarBloombergRuble to US dollar in 2014.

In all, Russia’s banking sector, under increasing pressure from a plummeting ruble and sanctions by the West over Ukraine, could get a capital boost of up to 1 trillion rubles under a new law being prepared by the government.

The central bank will soon choose a leading investor for bailing out Trust Bank, which is likely to be one of the country’s major banks, it said.

($US1 = 56.4600 rubles)

(Editing by Lidia Kelly and John Stonestreet)

More from Reuters:

This article originally appeared at Reuters. Copyright 2014. Follow Reuters on Twitter.

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.