The increase in the key rate is still “on the table” by the Bank of Russia, if inflationary risks are implemented. This was announced by the head of the Russian regulator Elvira Nabiullina in the State Duma (the lower house of the Federal Assembly of the Parliament of the Russian Federation).
“We are very careful about reducing the key rate, given, again, the experience of 2024. At the last meeting in March, the decline was not even discussed. Moreover, on the table, as they say, there is still an increase in the bet, if, as it was last year, inflationary risks are realized,” said Nabiullina, the words of TASS.
The head of the Central Bank noted that the key rate is not a “magic wand” and its untimely decrease in high inflation can lead to serious consequences.
“Everyone would like the bets to decrease faster, but it is naive to believe that the key rate is such a magic wand, and if you reduce the rate, not paying attention to high inflation, the consequences will be sad in the form of a new rise in prices and even more significant growth in market rates,” she said.
“In the next months, inflation will continue to decline by the end of the year, according to our assessment, will return to normal. But in general, the inflation will be even higher than 4%for this year,” Nabiullina said.
The head of the Central Bank also said that Russia has all components of national payment infrastructure. “This is a great advantage, believe me, not all countries have it. We have our own payment cards system, our own financial message transfer system, our own quick payments system. And largely, thanks to this, people almost did not feel new sanctions. And last year they were powerful,” said the head of the Central Bank.
In addition, Nabiullina spoke about the intention of the Bank of Russia to strengthen the responsibility for the use of cryptocurrencies in the calculations within the Russian Federation.
“Our position is unchanged – it is impossible to allow the crypt to penetrate the internal monetary circulation, calculations within the [country]. Here we propose to strengthen the responsibility for the use of crypts in the calculations within the country,” she said.
Nabiullina also recalled that the Central Bank proposes to allow and sell cryptocurrencies as part of an experimental legal regime.
Board of Directors of the Bank of Russia on March 21 decided to maintain a key rate at the level of 21 % per annum.
October 25, 2024, the Bank of Russia increased the key rate by 200 basic points, to a record level – 21% per annum.