Putin promises cash for Russian markets if needed

SOCHI, Russia Aug 9 (Reuters) - Prime Minister Vladimir Putin said on Tuesday the government and central bank would inject cash into Russia's financial markets if it proved necessary.

He also praised the European Central Bank's decision to purchase Spanish and Italian bonds to try to ease the euro zone sovereign debt crisis and hailed the United States' decision to increase its debt ceiling. "Here, in Russia, we must be watching liquidity and if the need arises, the Finance Ministry and the central bank will inject liquidity," Putin told reporters in the southern Russian resort of Sochi.

He added: "The ECB decided to buy Italian and Spanish bonds. It does not solve all the problems, but it is good."

Russia holds the world's third largest gold and foreign currency reserves, which now stand at $535 billion. The central bank can dip into them to keep the rouble and markets stable.

(Reporting by Gleby Bryanski; Writing by Lidia Kelly; Editing by Timothy Heritage)