Chairwoman: Russian cbank to retain moderately strict policy

SOCHI, Sep 9 (PRIME) -- The Russian central bank will continue a moderately strict credit policy in order to help the reduction of both inflation and inflation expectations, Central Bank Chairwoman Elvira Nabiullina said at a banking forum on Friday.

“As I have said many times, the monetary and credit policies of the central bank have remained moderately strict and they will remain so in future. This means that the interest rates in the economy, including the key rate, will exceed inflation by several percentage points.”

The banking sector of the country will have a structural liquidity surplus over the next several months, Nabiullina said. “The timeframe of structural surplus attainment depend on the intensity of federal budget funds spending.”

She said that in these conditions the key rate of the central bank will change its role, becoming a benchmark for fund placement rather than borrowing. “This change in the role of the key rate is in fact equal to its reduction. Nevertheless, the key rate, I want to emphasize, is still a benchmark for other rates on the money market anyway.”

The lending terms of Russian banks have eased for both companies and individuals over the last several months, Nabiullina said.

The central bank is concerned by potential growth of unsecured consumer lending: “The formation of a structural liquidity surplus favors growth of highly risky segments of the lending market. We are worried about a possible rapid growth of unsecured consumer lending which can slow down the inflation deceleration process,” the chairwoman said.

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