Russian Central Bank Governor Elvira Nabiullina and deputy governor Alexei Zabotkin gave a news conference after the central bank cut its key rate by half a point to 7.5% on Friday.
The central bank officials spoke in Russian. The quotes below were translated into English by Reuters.
NABIULLINA ON SALE OF OTKRITIE BANK TO VTB
“We are in the process now, the evaluation process should be completed by mid-October, so now it is impossible to even give a preliminary estimate … For now we expect that by the end of the year … we will complete this transaction.”
NABIULLINA ON RUSSIA’S FROZEN FOREIGN RESERVES
“As for the gold and foreign exchange reserves, the legal prospects – well, it’s a very lengthy process. We are preparing, studying this issue, how best to proceed.”
NABIULLINA ON USE OF FOREIGN AND CRYPTOCURRENCIES
“The currencies that we are used to, the reserve currencies – the dollar, the euro – have become toxic for many holders, because there are risks of (asset) freezes.”
“We see of course see that banks are trying to lower these risks … but it will always be possible to change foreign currency into roubles.”
“Our position is that we are ready to discuss ways to use digital financial assets (DFA), including cryptocurrencies, for international settlements, but we continue to oppose the use of cryptocurrencies as a means of payment and are against its free circulation within the country.”
“As for the digital rouble, we are very actively working on this project, and we consider it very important for the development of the financial system. We are now testing the digital rouble with 15 banks, but this is strictly a test.”
NABIULLINA ON FUTURE RATE CHANGES
“As we are close to the end of the easing cycle, we accept that the next step, as well as keeping the rate, could be a hike. However, we do not rule out a rate cut either.”
“We really think that the room for a further rate cut is shrinking.”
“Of course, we will look at the data, we cannot rule out some other movements, but the likelihood of a rate cut has decreased.”
NABIULLINA ON RATE CUT
“We assess that we are in the zone of a neutral monetary policy.”
“We considered three options – a cut of 25 basis points, a cut of 50 basis points, and keeping the rate unchanged.”
NABIULLINA ON INFLATION
“We do not rule out that annual inflation in first-half 2023 will be below 4%.”
“We see that one-time disinflationary factors are gradually losing their strength, while inflationary risks are growing.”
“People are now more inclined to save than to spend.”
“We are concerned that inflation expectations remain high.”
ZABOTKIN ON BUDGET AND RATE TRAJECTORY
“Now the baseline forecast … is based on the parameters of budget policy that the Ministry of Finance presented in June … If in the end the budget … (is) significantly different from those parameters, then this will be a significant factor that, along with others, will be taken into account when determining the rate trajectory for the year ahead.”
Published By Odoh Dominic Chukwuemeka
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