“Low inflation and rising credit”: That’s what the Russian economy needs

Igor Shuvalov and Vladimir Chistyukhin

Igor Shuvalov and Vladimir Chistyukhin

The financial market was the first to take the hit of anti-Russian sanctions. The ban on the largest Russian banks to provide financial services abroad, the freezing of their foreign assets, disconnection from SWIFT, the removal of banking applications from Google Play and the App Store, the withdrawal of the largest payment systems from Russia, the ban on the supply of euro and dollar banknotes to the country – all this has become Russian financial system is a serious test of strength and flexibility. How will the Russian financial system develop under the new conditions? Can capital flow restrictions be lifted? These and other topics were discussed by the participants in the discussion “The Russian financial sector in new conditions” on the sidelines of SPIEF-2022.


One of the main parameters of the financial system in the country is the key rate. It is formed on the basis of complex mathematical models that are built in the Central Bank. The task of the latter is to keep inflation close to 4% per annum. And the key rate is a tool that allows you to achieve this goal.

– It seems to me that the decisions we make reflect the current reality. The whole combination of factors, the adjustment of the economy to the new conditions, they led to the fact that today the rate is 9.5% per annum. If these conditions change for the better in the context of inflation – and we absolutely need low inflation for macroeconomic stability, for long-term financing and investment, for economic development – then perhaps we will have some prospects for lowering the rate, – said Vladimir Chistyukhin, First Deputy Chairman of the Bank of Russia.

Nevertheless, the key rate affects not only the inflation rate. The growth of the economy also depends on it. The lower the rate, the more affordable loans for households and businesses. Therefore, in the economic bloc, governments believe that the rate should fall a little faster.

– We are very pleased that we are gradually returning to pre-crisis rates. We understand the current inflation that has been in place in recent months. It allows you to more aggressively reduce the key rate. For us, the target is 5%, because we spent the whole year actually subsidizing revolving lending so that there were no problems with supplies and liquidity, – explained Ilya Torosov, First Deputy Minister of Economic Development of Russia.


Low rates are needed not by themselves, but for the further development of the economy. The more profitable it is for a business to borrow money, the more business plans will show a profit. And the more often entrepreneurs will decide on the risk of opening new projects. And these are jobs, taxes and real wage growth.

– We need infrastructure: payments, currency conversion, infrastructure for working with so-called toxic and other currencies. We need a recovery in the capital market – we understand that we have now fallen seriously. We need a huge growth in the loan portfolio. Now we have somewhere around 52 trillion rubles, but we need to reach 75 trillion in three years, – Ilya Torosov explained in figures.

The Central Bank has more conservative plans. They put financial stability first. Too sharp growth of the same loan portfolio can lead to acceleration of inflation. And then the same business plans that were profitable at the stage of preliminary calculations will become unprofitable in the process of implementation.

– Already today we need to seriously think about how fast we will return, and whether we will return to the borders that were. Of course, it is fundamentally important for both creditors and investors that they see the transparency of the activities of the entity in which they invest. On the other hand, we understand that the return cannot be too fast, we need to ensure financial stability, – Vladimir Chistyukhin explained.

However, many experts believe that a conservative approach now will set us back. The crisis for the economy is unprecedented. Such challenges cannot be dealt with by the old methods. New approaches are needed.

– Investors themselves, given these uncertain factors – the exchange rate, the key rate, and global uncertainty – will behave quite cautiously and not make decisions about entering new projects. The basic thing that needs to be announced to the market now is that the risk between the state, a commercial bank and a private investor will be built on a different scale. If this is not done, we will go through a very long period of cooling,” said Igor Shuvalov, Chairman of VEB.RF.


In the current environment, dollars and euros have become a toxic asset. The ruble exchange rate is growing. And the US and EU currencies are falling. But it is not possible to manage them in full. Both because of the sanctions of the West, and because of the restrictions imposed within the country.

– The main part of the population and corporations have almost all their savings in foreign currencies – this is the dollar and the euro. In this regard, it is necessary to approach the solution of this issue very carefully. It is impossible to use drastic decisions – at the expense of commission, negative interest rates – to reduce the value of an asset from your clients. Both business and individuals have suffered very seriously from the changed situation, to additionally deprive them of a part of their property is an unreasonable and wrong decision, – said Vladimir Chistyukhin.

He reacted to the behavior of some banks, which began to introduce commissions for servicing foreign currency accounts. And in some cases they reach 12% per annum.

“Against the background of what people have experienced with the restriction to use the currency, and also declare that they will pay for it with the value of their money, this cannot be done now,” added Igor Shuvalov.

At the same time, banks do this not from a good life. First, they have problems using toxic currencies. Secondly, in the current situation they bear losses. The lending market has dipped heavily, and high interest rates have to be paid on deposits opened in the spring.

– The banking system, despite the fact that it showed a high level of stability, still suffered losses. And if we want the potential for lending and other financial services to work, then it will probably be necessary to make decisions about some kind of capital injection. I think that in the autumn it will be possible to see some proposals on this topic, – Vladimir Chistyukhin promised.

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