Did you see this? Most likely not! The MSN definitely wants this kept on a low profile. Russia does not care if it is low profile or not but those out of Russia should care. The loan is not very likely to see widespread use at first, but it is looking like the Russians are contemplating long term and that gold is a part of their thinking’s…
MOSCOW, Aug 26 (Reuters Africa) – Russia’s central bank will offer gold-backed loans for up to 90 days at an interest rate of 7 percent, it said in a statement on Friday, expanding its lending facilities for dealing with any future liquidity crunch in the banking system.
The gold-backed lending was approved by the board of directors at a meeting on Friday. The rate on the facility is in line with the central bank’s Lombard rate on borrowing secured against high-quality bonds.
“This measure fits the central bank’s policy of developing refinancing instruments within the banking system. The facility will be unlikely in strong demand, only at times of liquidity crunches,” said Maxim Oreshkin, chief economist at Credit Agricole in Moscow.
Levels of rouble liquidity remain at comfortable levels for now, with the overnight interbank rate having hovered within 3-4 percent range since early 2010 compared to more than 10 percent seen during the crisis of 2008-2009.
Alexander Morozov, chief economist at HSBC in Moscow, said the new instrument will likely only be used by up to 1 percent of the whole refinancing market in Russia.
Looks like a way of gathering some extra gold out of the populace. Interesting, I know that I am behind the times on this but like I said it has been very low profile. Just like the fact that Russia has been buying gold like there is no tomorrow. Oh yes and so has China for that fact…
Windows to Russia!
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