So far the global financial turmoil has had a limited effect on Russia. Even though growth slowed in August, it remains strong – and the economy ministry recently upgraded growth forecasts for 2007 and beyond.
At the end of September, the RTS, Russia’s main stock market index, was fluctuating around 3-5 per cent below its historical high. The only sector where pressure was mounting was the money market, with overnight rates on the interbank market last week touching a two-year high of 10 per cent. Yet with inflation at around 8.6 per cent, September overnight rates remained negative in real terms.
