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Russia to join IMF program to deal with global market crisis

January 24, 2008 | RIA Novosti

Russia will participate in the International Monetary Fund's initiative to deal with the consequences of the current turmoil in the global financial markets, the finance minister said on Wednesday.

"At present, the IMF is outlining a policy to deal with the global market crisis. Russia will join this initiative," Alexei Kudrin said at an economic forum in Davos, Switzerland.

At the same time, the minister added that Russia does not intend to take measures to eliminate the consequences of the crisis in other countries. "We should only respond to the stability of our own economy," Kudrin said.

World stock exchanges have seen heightened volatility in recent weeks following the financial turmoil provoked by the U.S. subprime mortgage crisis and fresh signs of a recession in the world's largest economy.

Earlier on Wednesday, Kudrin called Russia a 'haven of stability', as the country's economy remained stable amid slumping global stock markets, and said that Moscow could offer financial assistance to the international community.

"As a country with substantial reserves, Russia could help soothe the global crisis," the Russian minister said.

The largest U.S. banks said earlier they would seek to raise equity abroad to shore up their liquidity.

Russia's Stabilization Fund, set up to accrue surplus revenue from high world oil prices, stood at 3.85 trillion rubles ($157 billion) on January 1, 2008, compared to 2.35 trillion rubles ($89.1 billion) a year earlier.

The Russian Trading System (RTS) index gained 1.83% during Wednesday morning's trade to 2,003.65 points, regaining most of the losses sustained in the past two days when it plunged 7.38% from Friday's close to below 2,000 on Monday afternoon, and fell another 5.83% to below 1,900 points on Tuesday morning.

However, the index was given a boost by the United States Federal Reserve's decision to slash its interest rate by three quarters of a percentage point on Tuesday, an emergency move to avoid a U.S. economic recession.

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