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Russia has averted crisis in banking system - Putin

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Russia has averted a crisis in its banking system by setting aside up to 9 trillion rubles ($325 billion) to bolster the sector, the Russian prime minster said Friday.
MOSCOW, December 12 (RIA Novosti) - Russia has averted a crisis in its banking system by setting aside up to 9 trillion rubles ($325 billion) to bolster the sector, the Russian prime minster said Friday.

"To date, about 4 trillion rubles has been made available to support the banking sector. In all, up to 9 trillion rubles has been reserved for these purposes," Vladimir Putin said, speaking at a session of the post-Soviet economic organization EurAsEC in Moscow.

The Russian premier also said the country would meet in full its international financial commitments and continue with plans to financially support neighboring economies.

Putin said Russia had transferred $1 billion to international financial organizations, granted Belarus a $2 billion loan, and intended to offer Kyrgyzstan a similar loan by the end of this year.

The former president also said inflation in Russia could total 13.5% by the end of this year.

"Inflation reached 12.5% in the first 11 months, and is expected to hit 13.5% by the end of the year," he said.

He also commented that despite the ongoing global financial crisis, Russia would end 2008 with a GDP growth of 6% and with a 7% increase in individual incomes.

The prime minister added that natural gas production in Russia in January-November 2008 had grown by 2.5%, while oil production had declined by 0.5% in the same period.

"No one doubts the status of Russia as a reliable supplier of hydrocarbons," he said.

Putin also said however that plummeting oil, metal and other export commodity prices could lead to a trade deficit.

On the topic of unemployment, he said the total number of officially unemployed people in Russia had risen to 4.6 million in October, an 8% increase year-on-year. He added that the situation could deteriorate further.

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