10 Feb 2009
Feb. 10 (Bloomberg) -- Russian banks asked the government for help rescheduling some of the $400 billion of foreign loans owed by the nation's companies, the Nikkei newspaper reported, citing the head of the Russian Association of Regional Banks.The association submitted a plan to the Russian government, the Tokyo-based newspaper said, citing an interview with Anatoly Aksakov, the association's president. The euro fell against the dollar after the report on concern a rescheduling may hurt European banks that are among the biggest lenders to Russian companies. The ruble was little changed.
"No one in the Russian government has ever suggested any debt restructuring was contemplated," said Eric Kraus, head of strategy at Moscow-based Otkritie Financial Company, a Moscow- based bank and brokerage. "The entire purpose of the slow, stepwise devaluation of the ruble was to allow companies to purchase sufficient foreign currency to repay debts maturing through 2010."
Liliya Khalikova, Aksakov's spokeswoman, confirmed that Nikkei had interviewed him. She declined to confirm or deny the contents of the report. Laine Santana, a spokeswoman at HSBC Holdings Plc in Hong Kong, was unable to comment. A Deutsche Bank AG official in Singapore declined to comment. Deutsche Bank and HSBC are among the foreign banks that indicated they would welcome Russian government involvement, the newspaper said.
European Banks
Russia has pledged more than $200 billion in emergency funding as plunging oil prices push the world's biggest energy supplier into its worst economic crisis since then-President Boris Yeltsin's government defaulted on $40 billion of domestic debt in 1998. The central bank expanded the ruble's trading band against a dollar-euro basket 20 times since Nov. 11, relaxing its defense of the currency as Russia's foreign reserves plunged 35 percent in the past six months.
The euro fell to $1.2819 as of 12:51 p.m. in Tokyo from $1.3003 late in New York yesterday. Europe's single currency slipped 1.5 percent to 117.12 yen. The Russian ruble advanced 0.1 percent to 36.13 per dollar.
"People expect that part of these debts were from the European banking system," said Sebastien Barbe, a strategist at Calyon in Hong Kong, the investment banking unit of France's Credit Agricole SA. "You already have a very weak banking system in Europe. If you have these Russian issues, the next step would be questions about whether similar problems will come out of other Eastern European countries."
Russia, the world's second-biggest oil supplier, will enter a recession and run a federal budget deficit this year for the first time in a decade, according to the government.
Prime Minister Vladimir Putin this month approved another 400 billion rubles ($11 billion) of aid for Russian banks in the "second stage" of a bailout plan that targets consumers and companies in the "real sector" of the economy.
