Cbanker: Russia has room for counter-cyclical monetary policy

MOSCOW, Jan 15 (PRIME) -- Russia still has some room for a counter-cyclical monetary policy, Central Bank Chairwoman Elvira Nabiullina said on Friday during the Gaidar forum.

“We should always have the possibility of conducting a counter-cycling policy. The interesting thing about this pandemic was that it was the first time that we have conducted the counter-cycling policy as a central bank, because we reduced rates instead of raising them,” she said.

“The Finance Ministry was also able to spend a large amount of accumulated resources. And this room for the counter-cycling policy … we still have some of it left, we are capable of reacting if the situation gets worse.”

Russia is more susceptible to the external shocks than the Western countries because it has no reserve currency.

“We are more susceptible to different external shocks. We have no reserve currency, as we have reiterated together with Anton Germanovich (Siluanov, the finance minister) time and time again,” she said.

This is why the regulator is very cautious about unconventional monetary instruments like low or negative interest rates and a buyback of assets. These instruments could hurt Russia.

“We are very cautious about it. There are limits to this unconventional policy. I think that the countries that use it are testing new frontiers each and every time. They see that nothing bad happens, inflation doesn’t grow, and the debts are serviced, and then they make another step and expand this policy. The way I see it, it would be a reckless gamble for Russia,” she said.

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