Compulsory reserve rate for banks may be cut

Central Bank Chairman Sergey Ignatyev will propose to decrease considerably the compulsory reserve rate at today's meeting of the Board of Directors of the Central Bank. He made a corresponding statement in the State Duma today.

This decrease will allow banks to improve their liquidity, although, according to Ignatyev, the present problems are likely to be of a psychological character. Ignatyev reported that the balance of correspondent accounts at Russian banks amounted to RUR223bn (about $7.68bn) as of July 1, 2004.