Central bank official says Russia's banking system stable

A top central bank official said Thursday that he was sure Russia's banking system was stable enough to withstand the current global liquidity crisis.

The Central Bank of Russia's (CBR) U.S. $415 billion foreign exchange and gold reserves are sufficient to maintain financial stability, Gennady Melikyan, deputy chairman of the CBR, said at a banking conference.
The figure is four times the amount necessary to pay for imports for five months, he added.

"It's more than enough to ensure stability," Melikyan said.

The statement comes amid a shortage of liquidity on global financial markets triggered by the current crisis on the U.S. subprime mortgage market.
Due to the shortage, capital recently started flowing from emerging markets to U.S. treasury bills, pushing their prices up and driving their yields down.
As a result, Russia's RTS benchmark stock index started falling in July, while the ruble started falling against the dollar after a long period of appreciation.

Earlier this month the CBR injected a large amount of cash into the market by buying securities under repurchase agreements, joining other central banks' efforts to boost liquidity.
The CBR also started earlier in August the first major purchase of rubles since 2002 to stop the ruble's depreciation.
Until recently the central bank focused on buying dollars and euros to prevent the ruble from appreciating.