We should be able to lower the key interest rate faster – Elvira Nabiullina

The Russian central bank governor Elvira Nabiullinahinted at a faster rate cut in his Monday appearance.

Featured Statements

We should be able to lower the key interest rate faster.

We would have to create conditions to make loans more affordable for the economy.

Monetary policy tightening in 2021 and diversification of foreign exchange reserves helped the economy remain resilient amid sanctions.

Russian banks reduced the share of foreign currency-denominated assets to 19% in early 2022 from 35% in 2016.

The Russian economy is entering a difficult period of sanctions-related structural changes.

The main problems for the economy will be related to import restrictions and trade logistics, export restrictions.

The central bank’s monetary policy will aim to bring inflation to the 4% target in 2024.

The central bank is considering making it more flexible for exporters to sell foreign exchange earnings.

The decision to suspend the markets was necessaryOtherwise, the outflow of foreigners would have caused volatility and triggered massive bankruptcies.

The bank manually managed the markets to limit volatility and calm the emotions of market participants.

The market reacted to the new situation much more smoothly than expected.

The Russians withdrew 2.4 trillion rubles from banks in late February and early March.

The central bank plans to launch a program to stimulate the import of equipment and raw materials that Russia cannot obtain on its own.

The central bank more than doubled its key interest rate to 20% when Russia was hit by Western sanctions after its special military operation in Ukraine in February, but later lowered it to 17%.

market reaction

The USD/RUB is extending his downfalls following previous comments. The pair is trading at 81.12, after failing to hold above the $83 mark.