statement by the head of the Central Bank, measures to control prices, worsening the situation: State Economy: Economics: Lenta.ru

The head of the Russian Central Bank (CB) Elvira Nabiullina during the XV VTB Investment Forum “Russia Calling!” spoke out about measures to combat inflation and when it will be possible to slow down the rise in prices in the country. According to her, now the situation has worsened due to a new pro-inflationary factor – the exchange rate.

Nabiullina explained why the rate cannot be reduced now

The head of the Central Bank, speaking about inflation, drew an analogy with the high temperature and pulse of a person when running a long distance. “You can run a short run with a high heart rate, but a long run is quite difficult,” she noted.

According to her, the Central Bank and the government are working on the sustainability of economic growth and ensuring that it is based on the growth of the economy’s potential. She explained that if we do not now respond with monetary policy to increased inflation and even begin to reduce the rate, this will only lead to an acceleration of inflation and a weakening of the ruble exchange rate.

“This will be perceived as if the authorities have admitted either their unwillingness or inability to curb inflation,” she emphasized. Nabiullina said that the authorities do not have time to wait for inflation to resolve itself, and added that the situation has now worsened due to the exchange rate.

The “braking distance” for inflation to return to the target will take the entire 2025

Nabiullina said that this year inflation will be higher than in the previous year. “But the stopping distance to our goal will take the entire next year and even extend into 2026,” she predicted a slowdown in price growth.

According to the head of the Central Bank, now it is necessary to raise the question of whether monetary policy is tight enough to return inflation to the target. Nabiullina added that this will be discussed at the last meeting of the board of directors in 2024.

Previously Nabiullina declaredthat the multiple increase in the key rate of the Central Bank over the past year and a half has become a forced measure to combat inflation. According to her, if the rate had remained at 7.5 percent, the country would have been really threatened by inflation in the region of 20-30 percent, and not less than 10 percent.