Russian financial market worst since 2008 – Central Bank deputy chairman
"There are plenty of issues. In the coming days, I believe, the situation will be comparable to the most difficult period of 2008, but I think that the experience of the many crises the Russian financial system has gone through will help us make the right decisions," said Shvetsov.
Shvetsov admitted the situation in the financial market is critical. “Even in a nightmare, we could not have imagined a year ago that this would be possible,” he said.
Talking about the Central Bank’s decision to raise its key interest rate to 17%, Shvetsov said the board of directors of the Central Bank made this decision, "choosing between a bad and an extremely bad option.”
He said raising the key rate wasn’t Central Bank’s last decision and that the regulator will soon introduce other measures aimed at stabilizing the situation.
On Tuesday, the Russian ruble again plunged to unprecedented lows - the euro hit above 100 rubles and the dollar reached more than 80. Both currencies gained around 20 percent since Tuesday’s trading began.
In 2008 oil prices lost 60 percent reaching US$40 a barrel. The growth in the Russian economy had seen a downturn in foreign debt to 5 percent of GDP and a public debt at 6.7 percent.
In August 2008 Russian foreign exchange reserves hit a record high of $598 billion but fell by $376 billion in March 2009. Now they are at around $ 418 billion.
The current situation has seen a 45 percent drop in oil prices with Brent and WTI crude below $60. The current foreign debt makes up 16 percent of the country’s GDP and public debt is 9 percent.