April 15, 2009

MOSCOW, April 15 (Reuters) - Russia's central bank could cut the refinancing rate from 13 percent in the next few weeks and sees such a move as the possible start of a trend, the bank's first deputy chairman said on Wednesday."It is most likely that it could be the start of a movement toward further rate cuts," Alexei Ulyukayev told a meeting of industry lobby the Russian Union of Industrialists and Entrepreneurs.He did not say by how much the rate could be cut.

The central bank also saw no need for additional capitalisation of the banking sector while the share of non-performing loans stayed below 10 percent, Ulyukayev said."Banks will be able to deal with that using their profits," he said.But if the government had to take stakes in banks in order to help them withstand a decline in their capital, the best way to do this would be through buying preferred shares, he said.Ulyukayev also said the central bank "was not ready to support" the idea of setting up a "bad bank" to accumulate crisis-hit lenders' nonperforming assets.