Source: ForexYard
The Russian ruble (RUS) has been getting hit by a market environment thick with risk aversion. Heightened sensitivity brought on by a German court ruling, Italy’s debate over an austerity package, and peripheral discussions over Greek debt have all led many investors away from the riskier currencies, including the ruble.
Moreover, as a bittersweet pill taken by the Russian economy lately, the Bank of Moscow (BoM) received a 14 billion ruble bailout from state-backed loans as part of a portfolio diversification program aimed at revamping the lender’s development initiatives following the ouster of its former president, Andrei Borodin, in a hostile takeover by VTB. Borodin has fled to London in fear that he may face jail time due to his connection to $415M in loans issued to the wife of Moscow’s mayor as part of a private real estate project.
The bank will be issuing 100 billion rubles in new shares to its primary shareholder, VTB, this year in connection with this latest move. The issuance of these shares was not expected until the end of 2012, but recent market downturns have moved deadlines forward. The bank seeks to increase and enhance its credit portfolio from a current volume of 30 billion rubles to roughly 200 billion rubles by expanding participation from small and midsized businesses.
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