MOSCOW, Russia - Yuri Luzhkov, the powerful mayor of the Russian capital city of Moscow, has caustically criticized the financial policy of the federal government, noting that such policy has further compromised the real economic sectors at the background of the current global financial meltdown. “Such government’s policy on high refinancing rates will eventually prompt mass corporate bankruptcies in the economy,” the mayor said at an interindustrial conference dedicated to economy and management of financial assets in the Russian capital.
Comparing refinancing rates in the United States, which current stands at 0-0.25% and Japan's refinancing rate at 0.1% with Russia, which currently stands at 13-20%, the mayor noted that such exorbitant banking interest rates have put most Russian companies on the extinction list. “The performances in our companies are worsening from day to day because of these expensive bank credits,” he said. “Today, these companies are running on their fund reserves, which are now fast depleting. This calls for external sources of financing, which are almost impossible for most companies to get because of the current exorbitant interest rates on bank loans.”
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