Financial Pulse: support package to help quicker economic rebound
Financial markets, both in Russia and across the globe, have been showing tentative signs of stabilising, helped by recent central bank action and expectations for positive developments around the new oil output cut deal. Even so, volatility in financial markets will likely remain high until the pandemic has peaked, notes the second issue of Financial Pulse, a weekly Bank of Russia digest.
Coronavirus-related external and domestic restrictions on business and consumer activity have combined with turbulence in financial markets to trigger a short-term but steep economic decline in the national and global economies. Hence the need for strong government action to support businesses and consumers most affected by forced restrictions.
According to the digest authors, the support measures being enacted to counter the pandemic will help bring about a quicker recovery once the virus pandemic has begun to peter out, at which point in time the restrictive measures are set to be gradually lifted.
The Bank of Russia has extended this week the list of pandemic-stricken sectors. Credit institutions lending to these sectors will enjoy a special procedure for recording loss reserve quality assessments and for setting up loss provisions. The regulator has also enabled lenders to keep Group I and II collateral valuations unchanged. Furthermore, in an effort to ensure that financial services are provided on an uninterrupted basis under lockdown, the Bank of Russia is taking action to encourage credit and non-bank financial institutions to switch to remote customer interactions.
