Government moves to buy mortgages from banks
The measure, announced by Deputy Prime Minister and Finance Minister Alexey Kudrin, would provide banks with further cash, and free them up to issue more loans. So far, the Government has given short-term loans to banks. By buying mortgages, the government will now provide greater long-term finance.
Evgenny Nadorshin, Chief Economist at Trust Bank says the move will help, but that the problems in the mortgage market are not as severe in Russia as they are elsewhere.
“Our problems with the mortgage market are not that deep as they are in developed countries, and we are not facing such a difficult situation on the labour market at the same moment as for example many developed economies do. In fact it was very likely that this measure of the Government of letting the borrowers to somehow postpone their repayments, to change the schedule for their repayments, to ease the burden on the individuals, may not have a very significant effect because this is not a very big problem on the market.”