Cbank sees global risks affecting Russia due to high exports

MOSCOW, May 31 (PRIME) -- The Russian central bank sees the risk of a chronically high global inflation that will affect Russia to a certain extent due to a high percentage of exports in the gross domestic product (GDP), the authority said in a statement on Tuesday.

"Global risks will continue to affect Russia to a certain extent in spite of the sanctions. The risks of capital outflow are insignificant, because Russia has a restricted financial flow, cooperation remains mainly with the friendly jurisdictions. However, due to a high share of foreign trade in the GDP, the Russian economy is still susceptible to the global risks of the current account," the statement read.

The central bank also said that in case of a significant increase of the global markets price, the debt risks can deteriorate, which might pose a threat to the more vulnerable states with accumulated structural imbalances.

The central bank is concerned with a significant slowdown of the global economy, resulting in a decrease of the prices for oil, metals and other components of exports. In the worst-case scenario, a decline of exports income will hurt the related industries, pressure the ruble, budget, and rise credit risks.

The central bank does not rule out higher unemployment in Russia in the months to come, it said.

Further development of the global economy will be marked by increasing disintegration, which might result in formation of the trade and currency blocs, creation of local payment systems and decrease of the U.S. dollar and euro role as the reserve assets.

The authority also said that demand for foreign tourism and foreign shares declined significantly, which is why, Russians sold 551 billion rubles more of foreign currencies than they bought between February 21 and March 22. The interest in China's yuans has increased since the start of March, and the purchases amounted to 27.3 billion rubles.

The central bank expects that during structural changes of the economy and its adaptation to sanctions, demand for corporate loans will increase, while the share of foreign currency loans will fall. Unsecured consumer lending is to stagnate in July–December 2022.

(63.0975 rubles – U.S. $1)

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