Russia's Rostec may stop high-tech exports due to high rates, says company head
Adds detail, quotes from paragraph 3 onwards
MOSCOW, Oct 23 (Reuters) -High interest rates may lead Russian state industrial conglomerate Rostec to stop exporting high-tech goods such as aeroplanes, ships and air defence systems, the TASS news agency quoted Rostec head Sergei Chemezov as saying on Wednesday.
Rostec is among a growing chorus of Russian industrial companies and lobby groups complaining of prohibitively high interest rates, with the central bank, widely expected to hike its key rate to at least 20% on Friday, bearing the brunt of the criticism.
"At such an interest rate, all profit is eaten up by the interest that we are forced to pay to the bank," the TASS news agency quoted Chemezov as saying. "Therefore, today the question is either we stop all exports of high-tech products - planes, air defence systems, ships and so on - everything whose production period is a year or more, or we need to do something.
"Using borrowed funds is simply not profitable for companies," Chemezov said. "If we continue to work like this, most companies will go bankrupt."
He said that even in the arms trade, businesses were not making profits of more than 20%.
Many companies are struggling with exorbitant borrowing costs. State-controlled hydroelectric power company RusHydro HYDR.MM added its voice on Wednesday, with company head Viktor Khmarin warning that dividend payments were a "difficult" issue due to the current level of interest rates, the Interfax news agency reported.
Should the Bank of Russia raise rates to 20% on Friday, it would match the level reached following an emergency rate hike in the days after Russia launched the conflict in Ukraine in February 2022.
Reporting by Reuters; writing by Alexander Marrow; editing by Jason Neely, Alexandra Hudson
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