ST. PETERSBURG, September 24. /TASS/. High inflation has been a concern for the Russian Central Bank and Russians for many years, so the regulator must ensure price stability, Central Bank Governor Elvira Nabiullina said at the International Banking Forum.
She noted various difficulties with the introduction of the digital ruble, adding that market participants are addressing them.
TASS has compiled the key statements by the regulator’s chief.
Digital ruble
There are various challenges with the introduction of the digital ruble, though market participants are addressing them: "Clearly, there are some issues, certain technical challenges, and cases with clients lacking understanding. The client’s way should be improved, which is natural for projects of such a scale. But I would like to say that all participating banks are working very promptly with us to resolve those situations."
The Bank of Russia is "not chasing" large amounts of funds to be stored in digital ruble wallets.
Stability of prices
High inflation has been a concern for the Russian Central Bank and Russians for many years, so the regulator must ensure price stability: "Not only the Central Bank has been concerned about high inflation for many years, price growth is what our citizens are worried about. This is why we should ensure price stability."
State of Russian economy
Profits to GDP in the Russian economy are currently at a healthy level comparable to that of 2017: "If we look at profits to GDP in the economy, the figure indicates the scale of profit the economy is generating. In terms of this indicator, we are currently at the level of 2017-2019 with steady economic growth and low inflation. This means the economy is generating profit."
Labor shortages, access to technology, and the investment climate are factors constraining the Russian economy: "We see among the factors holding back economic and investment growth are not so much the impact of interest rates, but rather labor shortages, access to technology, and the investment climate. There are sectoral issues, including structural deterioration in conditions for our export industries. This all should be taken into account in building our credit policy, of course."
Banking sector
There are no problems with banking liquidity on the market, this is a "far-fetched" issue, which is being "whipped up for some reason": "There is no shortage of banking liquidity. Banking regulations are responsible for this. Banks are meeting them with a comfortable margin, and we are keeping an eye on it."
The Central Bank’s banking regulation measures are not aimed at influencing monetary policy, but at ensuring the long-term stability of banks: "We do not aim to influence monetary policy. The instrument we use to influence monetary conditions is the key rate. This is our key tool we use. We apply regulations to ensure the stability of the banking system."
National Payment Card System
It is not required that only financial institutions be National Payment Card System (NSPK) shareholders: "We would like to attract not purely financial investors interested in returns from monopolistically set payment service fees. Our goal is to attract a high-quality investor, essentially a partner."
The Bank of Russia is actively discussing the sale of "a fairly large stake" in the NSPK with market participants: "We plan to start consultations with potential buyers as early as October."
In preparing for the NSPK sale, the regulator "assessed the possibility of reducing existing fees for banks," and it intends to gradually lower them: "After we reviewed the situation, we made a fundamental decision to gradually reduce fees for banks."
The Central Bank believes the NSPK should "remain profitable, self-sustaining, and capable of investing in development projects."
Demand for cash
The Bank of Russia sees a certain rise in demand for cash, but its share has risen only slightly and the situation is stabilizing: "We see an increase in demand for cash, but we need to have a broader, macroeconomic view of the economy. The money supply is also growing. Indeed, the share of cash in the money supply structure fell significantly in previous years because banks offered very attractive rates. As the rate is going down the situation is returning to normal to some extent. The share of cash in the money supply structure has risen slightly.".