Russian Central Bank: Sanctions Do Not Have Decisive Impact on Economy

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MOSCOW, Russian Federation – According to Elvira Nabiullina, chairman of the Central Bank of the Russian Federation, the impact of sanctions on the Russian economy is not decisive in scope. The Central Bank takes into account the factor of sanctions in the forecasts, but their impact on the country’s economy is limited.

Sanctions do not have a decisive impact on economic growth in Russia, said Elvira Nabiullina. The head of the regulator spoke at a press conference with journalists today. 

“With regard to sanctions risks, geopolitical, we, of course, take this into account as one of the significant factors in forecasting the development of the economy. But I want to say that, in general, the economy is adapting to these sanctions, and we see that the growth rates are now close to potential. This factor cannot be ignored, but it has a limited effect,” said Nabiullina.

Even Atlantic Council publication, the Washington Post – despite its propensity for fake news and a slanderous attacks on alternative and underground media, produced the infographic below, confirming – it would appear – their worst fears.

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According to Nabiullina, the Bank of Russia does not forget about a number of other geopolitical risks, including those associated with tense relations between the United States and China.

“As for the economic relations between the USA and China and the risks of trade wars, this is a significant risk for the global economy, of course. Therefore, we hope here that the truce that has been achieved will be sustainable. But the risks are nonetheless. And we take these risks into account in our forecast, ” the head of the Central Bank assured.

This is not to say that sanctions have had no effect on the Russian economy, as EU leaders extended economic sanctions against Russia over the alleged annexation of Crimea for another six months on Thursday.

Furthermore, the Bank of Russia Board of Directors decided to raise the key rate by 0.25 pp to 7.75% per annum, the regulator said in a press release issued after the Board of Directors meeting. They claim it is a move that will help to prevent inflation.

“The decision taken is proactive in nature and is aimed at limiting inflation risks that remain elevated, especially over the short-term horizon. There persists uncertainty over future external conditions, as well as over the reaction of prices and inflation expectations to the upcoming VAT rate increase. The increase in the key rate will help prevent firm inflation anchoring at the level significantly exceeding the Bank of Russia’s target,” the regulator says.

 

 

 

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