Press Clippings

10 August 2006Kudrin, Aven Assure Putin on Economy, The  Moscow Times, Bloomberg

Putin, right, with Alfa-Bank’s Pyotr Aven in the Kremlin on Wednesday. Aven told Putin the banking system was stable.

Finance Minister Alexei Kudrin said inflation would fall to 9 percent this year, Interfax reported.

Meanwhile, economic growth will likely rise to 6.6 percent, Kudrin told President Vladimir Putin in the Kremlin on Wednesday, the news agency said. The meeting came in the wake of a 0.7 percent jump in consumer prices in July. The increase was unusually large for a month when dacha-grown produce often leads to deflation.

Inflation exceeded 10 percent last year, while economic growth was 6.4 percent. Also Wednesday, Pyotr Aven, the president of Alfa-Bank, told Putin the country’s banking system was stable two years after the collapse of several lenders led to a run on deposits.

“Now the situation is very stable and there are no grounds whatsoever to fear a crisis, — Aven told Putin at a meeting in the Kremlin that was shown on state television. — People understand and feel this.”

Putin on July 28 signed a new law almost doubling the national deposit insurance limit after it worked its way through the State Duma. Deposits at member banks had heretofore been protected up to 100,000 rubles ($3,740), but now an additional 100,000 rubles will be insured for 90 percent of its value, giving depositors a maximum protection of 190,000. The law entered into force Wednesday. Russians’ trust of the national banking system is returning after they lost their savings three times during banking failures in the 1990s.

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