Russia’s central bank governor Nabiullina speaks after holding rates at 7.5%


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Russian Central Bank Governor Elvira Nabiullina and her deputy Alexei Zabotkin gave a news conference after the central bank left its key rate unchanged at 7.5% on Friday.

The quotes below were translated from Russian by Reuters. NABIULLINA ON INFLATION In November and early December, prices rose mainly due to one-off factors – most all of all, the indexation of utility tariffs. But the influence of factors that increase core inflation is increasing and this trend will continue next year. Annual inflation will continue to slow down in the coming months. When inflation is very volatile, the annual level says little about price pressures, since it is overloaded by past shocks. In the spring, annual inflation may even drop below 4%, but this is not a characterisation of how prices are changing in the here and now. NABIULLINA ON FUTURE INTEREST RATE DECISIONS We gave a neutral signal. This means the next decision, the trajectory of the rate, will depend on the incoming data, on which factors – pro-inflationary or disinflationary – will prevail. In our opinion, pro-inflationary factors prevail now, not only over the medium-term, but also over a short-term horizon. Therefore, rate changes will depend on incoming data. It is possible to hold the rate, increase it or decrease it – if disinflationary factors are realized, which we believe are weaker right now. NABIULLINA ON THE WEST’S OIL EMBARGO It is difficult to assess the impact it will have. We will try to do this at the February meeting, when we update our forecasts. There will also be more information, including about any retaliatory actions from the Russian side. We will take all this into account in February.

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The exchange rate is still in the same range in which it has been fluctuating since the beginning of summer, but now at the upper limit of this range. All other things being equal, a significant improvement in the terms of trade means a weaker exchange rate. From the point of view of risks in relation to our baseline forecast, we consider the risks from external conditions as pro-inflationary for the next 2-3 years.


We cannot comment on how difficult or what the probability would be. But in terms of the work on returning those assets, we are clarifying our legal position. But this is not an easy process.

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We are not concerned about the outflow of currency abroad. We do not consider it necessary to take any special measures in this regard. These funds will return to the Russian banking sector as confidence in macroeconomic stability and in price stability grows. Therefore, our task is to ensure that price stability, return inflation to the target of 4%, so that people have less reason to worry that their savings in roubles will be eaten up by inflation. We believe it is necessary to achieve this on the basis of economic incentives and market-based initiatives.


As for the sale of Otkritie, it is in the final stages. We confirm our intention to complete the transaction by the end of this year.

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When we had to take over Otkritie and perform the function as an owner, we considered this a temporary situation and said that it was necessary to exit the position of ownership as soon as possible. We are a regulator and a supervisory authority, therefore owning a bank is not normal.

As soon as we improved the bank we immediately began to prepare to sell it. We were going to sell it on the market, including at a possible IPO, but due to the change in the situation, that has become almost impossible. We believe this transaction will ensure the development of the banking sector without the participation of the central bank as an owner.

The bank’s next rate-setting meeting is scheduled for Feb. 10, 2023. (Reporting by Reuters)



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