Today in Russian Business – Feb 6th, 2009

Prime Minister Vladimir Putin announced that a government injection of 400 rubles ($11-14 billion) would be offered to Russia’s banks, falling well short of the $40 billion promised by Finance Minister Alexei Kudrin earlier this week.  Putin instructed that the money be channeled into consumer lending.  But the state-controlled Federal Grid Company, for example, says it will need to borrow as much as 20 billion rubles ($551 million) this year, and state bank VEB’s supervisory board has just approved a $413.2 million subordinated loan to Gazprombank.  The Kremlin may be intending to keep its budget spending high in an effort to stimulate economic growth, proposing no imminent cut, but perhaps ‘a change in spending structure’.  Moscow is holding an investor conference this week for a ‘dwindling but hardened band of Russia enthusiasts’.  The official rate of unemployment now stands at almost 8 percent, or 5.8 million, and is expected to rise to 7 million by the end of the year.  ‘Russia’s currency dilemma is unique in major emerging markets and adds considerably to the risk perception of the country amongst investors.’