Cbank says repetition of 1998 crisis in Russia impossible

MOSCOW, Aug 16 (PRIME) -- The economic crisis of 1998 will unlikely happen again in Russia now as the country’s economy has become much more resistant to shocks because of the authorities’ policies, the central bank said in a statement on Tuesday.

On August 17, 1998, the Russian government and the central bank announced a default on domestic debt which led to a sharp collapse of the ruble.

“The current situation differs essentially from the situation of 1998 which in fact, makes repetition of these events impossible. The existence of a significant amount of accumulated reserves (sovereign funds and foreign currency reserves of the central bank), a low level of state debt including the foreign one and a flexible rate of the ruble are the key differences,” the central bank said.

The central bank’s monetary and budgetary policies are well-balanced and quite conservative. “All this is a guarantee of a higher resilience of the Russian economy to external shocks.”

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