MOSCOW (Reuters) -Russian Central Bank Governor Elvira Nabiullina addressed a news conference on Friday after the central bank raised its key rate to 18%.
She spoke in Russian. The quotes below were translated into English by Reuters.
ON RATE DECISION
“The absolute majority of the discussion participants were in favour of raising the rate to 18%, but there were also suggestions to keep the current rate level at 16%…there were also were proposals to raise the rate to 19%, to 20%.”
“We assumed that for inflation to return to the target, taking into account a 16% rate, simply more time is needed for the tightness of monetary conditions to show a decline in inflation, taking into account the lag.”
“We decided to raise (the rate) to 18%, but, as I have already said, we do not rule out further increases. Our further steps will depend on incoming data.”
ON DUTIES
“…An increase in duties is always pro-inflationary, almost always a pro-inflationary factor, but we think that the effects of the current decision will be limited because they will not affected a very large group of goods, the market basket, up to 7%, if I am not mistaken. So we think that these effects are limited.”
*ON CHINA’S CENTRAL BANK
“We are also watching the situation in China, of course, not only the central bank’s policy, (but) what is happening with the development of the economy, this is our key trading partner.”
“As for their rate decision, they have a different monetary policy regime. Furthermore, their problem is not high inflation, but low inflation. China is now balancing around zero inflation, they are pursuing a policy diametrically opposed to ours, because our task is to reduce inflation, while their task is to avert deflation.”
(Reporting by Reuters; Compiled by Lucy PapachristouEditing by Andrew Osborn)
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