Russian Central Bank Governor Elvira Nabiullina held a news conference in Moscow on Friday, where she announced that the central bank would maintain its key interest rate at 21%. Nabiullina stated that the possibility of a rate cut was not discussed, emphasizing the need for stable inflation trends before considering any potential rate adjustments.
Regarding the possible impact of a peace settlement in Ukraine, Nabiullina deemed it premature to incorporate such scenarios into economic forecasts, emphasizing the unpredictable nature of the situation.
Nabiullina expressed concerns about high inflation levels, predicting a peak in April or May, and highlighted the importance of ensuring a steady decrease in inflation to meet the target level. She also addressed corporate lending trends, stating the need for more data to confirm any sustained slowdown.
Discussing the Russian ruble's recent strengthening and its disinflationary effects, Nabiullina acknowledged the lag in price adjustments and outlined the potential challenges faced by leveraged companies amid growing costs. Despite noting an increase in requests for financial restructuring among small and medium-sized businesses, she reassured that the majority of businesses were maintaining financial stability.
Nabiullina emphasized the importance of finding a balance between economic growth and inflation reduction, highlighting the necessity of controlling inflation for sustainable economic development. She addressed the resilience of banks, noting the importance of maintaining capital reserves and tightening requirements to ensure financial stability within the banking sector.