Russia’s biggest bank, Sberbank, has increased its lending rates for companies by up to three per cent. Analysts say this will lead to a significant rise in cost of borrowing for the overall economy.

The decision to increase lending rates by up to three per cent will primarily hit large Russian companies. Analysts say Sberbank was previously giving loans at lower rates than its competitors to subsidise many companies. Now, many domestic banks will no longer feel the pressure of Sberbank undercutting them according to Richard Hainsworth, General Director of Rusrating.

“They are now looking towards the market to see what sort of rates that they should be setting, and have begun to increase their rates to market rates.  In other words, Sberbank is no longer subsidizing very large or favoured companies.”

Just a year ago Russia was seen as a relatively safe haven from the global liquidity crisis. But now it seems to have started to bite, with signs of a liquidity crisis already appearing. Investors’ perceptions have changed; the ruble made big falls against the dollar last week. On Monday, the Central bank stepped in, providing access to extra funding for the banks. That's in addition to $2.4 Billion worth of budget funds the finance ministry provided to the banks. Maksim Osadchy, Analyst at Antanta-PioGlobal says it’s a sure sign the liquidity crunch has come to Russia.

“The signs of a liquidity crunch were seen at the recent REPO auction. Loans by Central Bank for up to 148 billion rubles were sold. The situation is quite tense at the moment and Russian economy is shaking.”

The ministry will offer as much as 160 billion rubles, or over $6 Billion, of one-week loans on Tuesday – the first time Russia has held two auctions in a week since starting the program in April.

Russia's banks are unlikely to face collapse in the face of the credit crunch, but the higher cost of borrowing is likely to have serious implications for corporate borrowers in the near future.