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Russian govt under pressure to weaken rouble -Dep PM

Published 11/20/2008, 01:12 PM
Updated 11/20/2008, 01:14 PM

MOSCOW, Nov 20 (Reuters) - Private businesses have pressured the Russian government and the central bank, asking them to allow the rouble to depreciate, First Deputy Prime Minister Igor Shuvalov said on Thursday.

The central bank spent $57.5 billion to support the Russian currency in Sept-Oct before allowing it to weaken by 1 percent against the dollar/euro basket on Nov. 11. Most bank analysts said the move was a mistake due to wrong timing.

"We felt certain pressure from experts and business communities to allow the rouble to depreciate significantly and sharply," Shuvalov, who coordinates anti-crisis policy in the government, told reporters.

Shulalov blamed Russia's commercial banks for deliberately putting pressure on the government in order to profit from selling foreign currency should the rouble weaken.

"In a strange way we felt most of this pressure after we had given liquidity to the banking sector, and all this liquidity poured into foreign currency," Shuvalov said.

Shuvalov said banks which had received state cash but converted it into foreign currency would soon be banned by law from accessing state funds. He said a new law would give the central bank sweeping powers to monitor where the money goes. (Reporting by Gleb Bryanski; Editing by Ron Askew)

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