MOSCOW, December 20. /TASS/. The decisions taken by the Bank of Russia will ensure a decline in inflation in the country in coming quarters, Central Bank Governor Elvira Nabiullina said at a press conference following the meeting of the regulator’s board of directors.
Earlier, the Bank of Russia kept the key rate at 21% per annum. Nabiullina noted that the criticism of the regulator "intensifies in particular" in the period of high rates, adding that it takes decisions depending on its assessment of the situation and forecasts.
TASS collected the key statements by Central Bank Governor.
On the key rate
The Bank of Russia has taken a pause in raising the key rate, though a long period of tough monetary policy will be required to bring inflation back to the target: "We made a decision today to keep the rate at the level of 21% per annum. Tough monetary conditions have evolved in the economy, which are to provide for inflation slowdown in coming quarters."
The regulator also considered an increase in the rate to 22% and 23% per annum.
The Central Bank does not consider banking regulation as an instrument to solve monetary policy tasks, "the key rate is for them."
The Bank of Russia estimates the current level of the key rate as "rather high," though it may get back to discussing the issue of its increase in February.
On inflation
Elevated inflation expectations "may prolong the trajectory of the inflation decline to the target."
Keeping the key rate at low levels would have brought inflation above 20%.
Stabilization of the budget policy in 2025 will be an important factor for inflation slowdown in Russia.
On the ruble’s exchange rate
The volatility of the ruble’s exchange rate is higher today than prior to 2022, and it will persist so far.
The ruble’s exchange rate should remain floating, currency interventions in the periods of volatility hinders its stabilization.
"Low inflation, all other things being equal, makes the exchange rate more stable."
On the banking sector, credit activity, deposits
Russia’s banking sector feels very stable, with sanctions having become the key challenge of 2024.
Ninety-five percent of the banking sector is blacklisted but banks find ways to work in such conditions.
According to high-frequency data, credit activity in early December "remained restrained."
Russian banks have "an absolutely reliable" source for payment of high interests on deposits.
On criticism of the Central Bank and confidence of households
Criticism of the Bank of Russia "intensifies in particular" in the period of high rates, though the regulator takes decisions depending on its assessment of the situation and forecasts.
It is only possible to regain the trust of households in price stability after a long period of prices growth by slowing down inflation and keeping it at around 4%: "There is nothing impossible in it."
On the labor market
The Bank of Russia sees prerequisites for easing of pressure on the labor market, which occurred due to the shortage of manpower.
On risks of trade wars
Risks of trade wars and a cooldown of the economy "have somewhat increased" in the world by now.