Russia to start printing money to assist billionaires under sanctions

The Russian government has already given assistance to sanctioned billionaire Viktor Vekselberg’s Renova Group, and is currently working on financial support measures for Oleg Deripaska’s companies, including Rusal and the GAZ group, as announced on Monday by Russia’s acting  Finance Minister Anton Siluanov.

Vekselberg, who asked the government for a total of $5.7 billion, was given assistance last week, Siluanov noted.

“I simply would not like to talk about amounts,” Siluanov responded when asked how much Vekselberg had received from the government.

However, the Russian government does not consider it impossible that the billionaire, who holds 9th position on Forbes’ list of wealthiest Russians, will be given additional assistance.

The issue of an injection of finances for Oleg Deripaska’s assets is being worked on simultaneously, Siluanov noted.

Promsvyazbank may be used for this purpose. The bank was nationalized last December and is being turned into a bank for the state defense order.

The Central Bank will print money for Promsvyazbank. The regulator has already poured 443 billion rubles ($7.15 billion USD) into the bank as a pure monetary emission. Of that, 330 billion rubles ($5.33 billion USD) came as loans (of which Promsvyazbank repaid 100 billion rubles in March) and another 113 billion rubles were for replenishing capital, which was in the negative (-170 billion rubles in March) and remained so after the first portion of assistance (-59 billion rubles in April).

Another 130 billion rubles ($2.10 billion USD) will soon be printed for Promsvyazbank. These funds will be added to the bank’s balance as a result of a deal to buy back OFZs (Federal Loan Obligations) from it, Central Bank deputy chairman Vasily Pozdyshev announced on April 2.
Promsvyazbank will receive an additional 5 billion rubles at taxpayers’ expense. This amount was added by the Finance Ministry to a draft amendment of the Federal Budget for 2018.

However, the matter of whether to grant loans to companies under US sanctions will be decided by Promsvayzbank itself, Siluanov explained.

He added that funds may be received by both Rusal, which can no longer supply aluminum to the world market, and the GAZ group, which is in danger of having to stop its assembly line due to sanctions which affect imported components.
The possibility of a state buyout of En+ and Rusal shares is not yet being considered, Siluanov noted.

  Sanctions on Russia, Russian oligarchs