The Bank of Russia was forced to move on to a tough monetary policy (DCP), this is a new situation for the Russian economy. This was stated by the head of the Central Bank of the Russian Federation Elvira Nabiullina in the State Duma.
“We were forced to enter during a tough DCP, this is a new situation for our economy,” said Nabiullina, whose words are given by Russian media.
According to her, a tough monetary policy is not a “whim” of the Bank of Russia, but an “inevitable reaction.”
“In general, a tough monetary policy is not a whim of the Central Bank, it is an inevitable reaction to what is happening in the economy and in the current conditions the economy and the state, and private business should direct resources to the priority direction,” the head of the regulator believes .
According to her, the period of a tough DCP “pays off, many countries have passed through this before they have achieved steadily low inflation and the advantages that give low inflation, including affordable market mortgages and affordable business loans.”
The head of the Central Bank noted that high inflation can only be beneficial to the business whose goods people will be forced to buy regardless of price growth.
“This business will retain the margin, but citizens pay for this. Inflation for all other enterprises is a huge factor in the uncertainty of the future financial result. When high inflation, the economic growth cannot be sustainable. I emphasize that high inflation means unpredictable inflation. This is a dangerous illusion that increased inflation can be reliably held in some corridor. She.
According to Nabiulinn, a decrease in inflation to 4% will be evidence that the Russian economy has returned to a “safe harbor.”
“According to our basic scenario, according to the results of 2025, annual inflation will be slightly higher than our target – 4.5-5%, and in 2026 it will stabilize near 4%, in terms of current pace, a month to a month, inflation will decrease before 4% earlier, at the end of next year.
“If we do not compensate for the influence of additional dulling factors on demand and inflationary expectations, then the inflation growth will continue and we will finish 2025 with even higher inflation than we have now. I believe that you will all agree that this is unacceptable”, ” she added.