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Citibank Forecasted Liquidity Crisis in Russia in Spring
The bank sector of Russia will suffer from ruble shortage in the nearest two months, Citibank forecasted based on its survey and blaming the impending crisis on significant payment of foreign corporate debts in March and quarterly tax payments in April.
Russia’s market will face the surge in debt payments in March, including the payment of sovereign debt, RBC Daily reported. According to Citibank analysts, the March payments may amount to around $10 billion and the better part will go to settle the arrears of Rosneft ($5.7 billion) and Evraz Group ($1.8 billion).
April is the month of quarterly tax payments, which will go up on the new methods of VAT collection this year. Russia’s corporations will pay taxes for the whole quarter contrary to the 2007 practice of monthly payments, Citibank analysts said, estimating the VAT payments to equal from 400 billion rubles to 600 billion rubles.
Analysts in Trust Bank are more optimistic. “Under our estimate, the budget return payments will be also effected in March, so the budget will pull from the market only 300 billion rubles instead of 600 billion rubles as a result,” Vladimir Bragin said, adding that the export revenues will support the liquidity level as well.
At the same time, the Central Bank of Russia (CBR) and the government have enough resources to inject the amount that would suffice to maintain the required liquidity. CBR may ensure liquidity of 1.6 trillion rubles via the REPO transactions and roughly 1 trillion rubles could be transferred from treasury accounts to commercial banks, the analysts of Citibank said making their forecast not so appalling.
Of interest is that Citibank analysts have actually echoed the forecast of CBR First Deputy Executive Alexei Ulyukaev. Ulyukaev predicted the peak of banking refinancing for March and April and specified that it would require some 300 billion rubles to 400 billion rubles a day. The causes of such shortage, Ulyukaev explained, are big VAT payments, capital outflow and debt settlement.
www.kommersant.com
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