Russia Weighs Bankruptcy Ban to Shield Metals Industry

Russia is considering a ban on bankruptcies in its struggling metals industry due to declining demand, high interest rates, and a strong rouble. The move aims to support the sector, similar to efforts in the coal industry. Analysts anticipate a central bank rate cut as the economy slows.

In a bold move to bolster its struggling metals industry, Russia is deliberating a potential moratorium on bankruptcies, according to a government document revealed on Wednesday. This action reflects apprehensions over dwindling demand, elevated interest rates, and a robust rouble impacting the sector's stability.

The document, originating from the government's financial stability commission meeting on August 28, requests proposals from the economy and industry ministries by October 28 regarding the moratorium's advisability. Such a measure would extend the government's ongoing support strategies akin to those deployed in the ailing coal industry.

As the world's fifth-largest steel producer, Russia's steel demand has seen a significant decline, leading major firms like Severstal to face sharp profit drops. With economic growth slowing and an anticipated interest rate cut by the central bank, the overall economic outlook remains cautious.

(With inputs from agencies.)