Russian Central Bank Governor Suggests Additional Rate Cuts Two Years to Achieve Inflation Target | Reuters

[Archyde.com]-Russian Central Bank Governor Elvira Nabiullina has signaled an additional rate cut on the 18th. He also said that inflation will return to its target of 4% in 2024.

On April 18, Central Bank of Russia Governor Elvira Nabiullina (pictured) pointed out that the Russian economy has a limited duration of financial reserves and needs to change its economic structure to deal with the effects of international sanctions. Showed recognition. Taken in Moscow in June 2019 (2022 Archyde.com / Evgenia Novozhenina)

He also pointed out that the Russian economy has a limited duration of financial reserves, and acknowledged that the economic structure needs to be changed to deal with the effects of international sanctions.

“There is a limit to how long the economy can survive with reserves,” he told lawmakers. “In the second and third quarters, we will enter a phase of structural transformation and the search for new business models.”

It seems that this will be accompanied by soaring prices of some goods, and the inflation rate is expected to exceed the target, but he pointed out that the cause is not the expansion of demand but the shortage of supply.

“Therefore, we will not use any means to reduce (inflation), which will hinder corporate adaptation,” he said. “Inflation growth should not be unmanageable.” Said that it would reach its inflation target of 4% in 2024.

“There must be the possibility of lowering key interest rates even faster. We need to put in place conditions to increase credit to the economy,” he said.

Regarding sanctions, it mainly affects financial markets, but “the impact on the economy will begin to expand in the future. Import restrictions and logistics of foreign trade are the main issues, and export restrictions are also in sight in the future.” rice field.

Russian companies have to adapt, “manufacturing needs to seek out logistics with new partners and switch to production of previous generation products,” he said.

The exporter said it needed to arrange logistics with a new partner and “these things will take time.”

The Governor explained measures to support economic adaptation. He said he was considering making exporters more flexible in selling foreign currency income and was testing the issuance of digital rubles to allow Russian citizens to exchange funds between digital wallets. Exams related to this project are scheduled for later this year.