MOSCOW, Jan. 28 (UPI) -- Russia announced Wednesday it will move trillions of rubles to reinforce its economy after a credit downgrade and the impact of sanctions and declining oil prices.
The National Wealth Fund, Russia's sovereign store of state-owned financial assets, will transfer 300 billion rubles ($4.4 billion) to the state development bank VEB to encourage business lending, and 1 trillion rubles ($14.8 billion) to the banking sector to sell debt. The decline in the value of the ruble, and in the value of the country's largest export, oil, have caused major outflows of capital from Russia.
The downgrade of Russian debt to junk status by Standard & Poor's investment service, earlier this week, had little effect on markets, in part because it was expected and in part because few shocks are left for the Russian economy, CNBC noted. The reduction increases the cost of government borrowing.
Russia's Central Bank warned the country's gross domestic product could fall by as much as 4.8 percent in 2015 if oil prices, now about half their former value, do not increase.
