MOSCOW – President Dmitry Medvedev unveiled new measures Tuesday to prop up Russia's shattered banking system, injecting billions of rubles to ease a liquidity shortage one day after the country's stocks suffered their worst-ever day of trading.

Russian markets were mixed when they reopened after regulators suspended trading early Tuesday in a bid to avert further damage.

Medvedev announced the government would lend 950-billion rubles ($36.3 billion) with a five-year term to banks. Most of the money will go the country's two largest state-backed lenders, Sberbank and VTB, in an effort to get liquidity moving through the whole system. A further 223 billion rubles will be loaned to banks in particular difficulty.

This comes on top of some $170 billion pledged already by the state in recent weeks in the form of loans and relief.

Russia's liquidity crisis was triggered by September's stock market collapse and a crisis in confidence among banks.

The liquidity problems have sparked fears that Russian companies – many of which cannot get overseas funding because of the global credit crunch – will default on existing loans or will have to pay much higher interest on their borrowings.

Russian companies – many of which have borrowed on their securities – are estimated to have some $45 billion in debt that must be repaid by the end of this year.

Russia's markets, meanwhile, put in a mixed performance Tuesday.

The RTS resumed trading at 1 p.m. (0900GMT) and rose 2.3 percent to reach 886.2 points – after briefly breaching 900 points – as of 3:50 p.m (1150GMT). The MICEX, where most trading takes place, pared back earlier strong gains to fall by 1.2 percent to 742.8 points. It opened at 1:15 p.m.

The indexes of both the RTS and the MICEX dropped 19.1 and 18.7 percent respectively Monday amid concerns about the falling price of oil – key to Russia's economy – and fears about the international financial crisis. The RTS, which has plunged nearly 65 percent since May, suffered its worst-ever one-day loss.

The government has come under criticism from businesses and analysts for being slow to react when the banking crisis emerged in September as stock markets crashed amid turmoil on Wall Street. After shutting the markets down for two days, the government emerged from crisis meetings with a raft of measures to shore up the markets, providing short-term relief.

Earlier this year, as international economic problems accelerated, Russian officials including Finance Minister Alexei Kudrin contended that Russia's economy would be a haven of stability because of world demands for energy. But as commodity prices have plummeted – sending the shares in many oil and metal companies sharply down – investor concerns are now focusing on the risks of a commodity-based economy.

“Until the price of oil finds some floor ... Russia risk is a fringe luxury that most global investors will avoid for now,” Chris Weafer, chief strategist at UralSib, wrote in a note to investors.

Investors started to shun the Russian market in early summer, after the Anglo-Russian oil joint venture TNK-BP suffered sustained harassment at the hands of government agencies and Prime Minister Vladimir Putin publicly attacked steelmaker Mechel over allegations of price-fixing.

Russia's invasion of Georgia in August was seen by some investors as the last straw, prompting flight of around $7 billion in a matter of days.

Meanwhile, Iceland said Tuesday that the Russian Central Bank would lend it 4 billion euros ($5.44 billion) in financial aid to shore up the country's foreign-exchange reserves and support its falling currency.

Russian deputy finance minister Dmitry Pankin, however, denied that the two countries were in talks on a deal, Russian news agencies reported.