EBRD says US Fed key rate increase can hurt Russian economy

MOSCOW, Dec 18 (PRIME) -- A recent increase of the key rate by the U.S. Federal Reserve System (Fed) can negatively affect the Russian economy, the European Bank for Reconstruction and Development (EBRD) said in a statement Friday.

“This (the rate increase) may affect their (EBRD countries’) growth prospects, although the impact is likely to be limited, given that most EBRD countries were not among the major beneficiaries of post-crisis capital inflows,” the bank said. “Countries that are perceived by the markets as having weaker fundamentals or as being exposed to geopolitical uncertainties – for example Turkey, Russia and Ukraine – may be affected more.”

Russia will also be adversely affected by the commodity price fall on a stronger U.S. dollar but the effect will be limited because fuel prices are mainly defined by “more fundamental forces,” the EBRD said.

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