Nabiullina (Russian central bank): We had to raise interest rates

Russia’s central bank governor Elvira Nabiullona gave a press conference after the morning sharp rise in interest rates to 20% from 9.5%.

The head of the central bank stressed that he raised interest rates as the new sanctions caused a significant deviation of the ruble exchange rate, and limited the bank’s choices to use its reserves in gold and foreign exchange.

“We had to increase the interest rate that would compensate citizens for the increased inflation risks,” he said.

He added that the central bank will be flexible in using any tools needed.

“The banking sector has experienced a structural liquidity deficit, the banks have enough coverage to raise financing from the central bank,” he said.

Nabiullona stressed that “we have taken a number of measures that will allow banks not to increase their forecasts during the year. The measures taken are equivalent to an increase of 900 billion rubles in bank capital.”

Source: Capital

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