“The head of Russia’s Central Bank, Elvira Nabiullina, is facing sharp criticism from the political and business elite over record high interest rates.”, — write: epravda.com.ua
The head of Russia’s Central Bank, Elvira Nabiullina, is facing sharp criticism from the political and business elite over record high interest rates. Bloomberg writes about it. Nabiullina, who has held this position since 2013, found herself under pressure on the eve of the regulator’s last meeting this year regarding the key rate, the agency writes. According to analysts’ forecasts, the rate in the Russian Federation may be increased from the current 21% to 23%, and possibly even to 24% to curb inflation. Bankers, businessmen and government officials who have the opportunity to address President Vladimir Putin are increasingly complaining about Nabiullina’s actions. According to the publication’s sources, even Prime Minister Mykhailo Mishustin told Putin that the central bank’s actions are complicating the government’s efforts to stabilize the economy, which has been hit by sanctions.Advertisement: Despite this, there are no signs that Putin plans to change the leadership of the central bank. According to sources close to the Kremlin, the president believes that Nabiullina is acting within the framework of necessary measures to support the economy. The Central Bank of the Russian Federation, under her leadership, raised the key rate from 16% to 21% from July, trying to return inflation to the target of 4% by 2025. Annual inflation was 8.88% in November, up from 8.54% in October, Bloomberg reports. Nabiullina played a key role in stabilizing the Russian economy after the annexation of Crimea in 2014 and after the start of a full-scale invasion of Ukraine in 2022. In the first days of the war, it raised the interest rate to 20% to stabilize the ruble, but later gradually lowered it. Advertisement: As the publication writes, the business elite also expresses dissatisfaction. Alexey Mordashov, the owner of the Severstal steel company, called for a discussion of the impact of monetary policy on inflation. Herman Gref, the head of Sberbank, warned against the risks of stagflation and urged not to “bend the stick” by raising rates. Some large companies, in particular the state corporation Rostec and Rosneft, say that high rates put their operations at risk. Serhiy Chemezov, head of Rostec, warned about the risk of bankruptcy of most enterprises due to the high cost of loans. We will remind: The average maximum rate on deposits in the ten largest retail banks of the Russian Federation in the first decade of November increased by 0.74 percentage points to 20.91% – this is the maximum value since 2009. At its meeting on December 15, the Board of Directors of the Central Bank of Russia raised the key rate to 16% – the fifth time in six months.