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22 Apr, 2008 04:29

Investors mindful of Russian inflation

High inflation and the so-called “Gazprom clause” have come under the spotlight at the Russia Investment Roadshow in London.

Some analysts and businessmen believe inflation is a more serious challenge to Russia than the global economic slowdown.

The Central Bank of Russia has pumped up to $US 25 billion into the domestic banking system, following the example of Europe’s central bank.

Dmitriy Pankin, Russia’s deputy finance minister, told RT that any influx of money could further hike Russia's rampant inflation.

Britain’s Business Secretary John Hutton hit out at the “Gazprom Clause”, or “reciprocity clause”, during an interview with RT.

“I think there’s a danger that this word – ”reciprocally« – becomes actually another way of erecting new and different trade barriers,» Hutton said.

The arrangement was proposed by the EU in order set tough restrictions for the Russian monopoly, and, consequently, not let the giant take over European energy firms, unless the country opens its own gas markets.