Medvedev says Russia needs no changes to monetary policy

MOSCOW, Apr 17 (PRIME) -- Russia doesn’t need to change anything in the central bank’s monetary policy as it allows the economy to improve with low inflation and creates a necessary safety net, Prime Minister Dmitry Medvedev said on Wednesday giving an annual report on results of the government’s work to the State Duma, the parliament’s lower house.

“I don’t think that any adjustments are necessary to the model (of monetary policy) in this regard as the model allows us to develop while keeping low inflation, it makes people’s life easier and creates a safety net for us, our reserves are growing as well as the possibility to use additional funds,” he said.

“In other words, redistribution of powers in the system of relations between the government and the central bank has been included in the law and needs no adjustment,” he said.

Russia’s inflation sped up a bit in 2019, but authorities expect it to return to the target of 4% until the end of the year. “It (inflation) was close to the target level at the end of last year, while at the start of this year it sped up a little bit, and we expected that. But we also expect the short-term growth to stop and inflation to return to the target level until the end of the year,” he said.

He also said that the Russian government managed to expand its foreign exchange and gold reserves by almost U.S. $30 billion in 2018, while the country’s sovereign debt shrank by more than $60 billion, he said.

The Russian agricultural industry also showed strong results in 2018, and its exports grew by 20% last year to $25 billion.

“Russia’s wheat occupies the top place in the world, but exports of other products are also growing, including meat, milk, and others,” he said.

Improvements in agriculture have an impact on related industries, like fertilizer production and building of agricultural machines. Exports of agricultural machines grew a record 40% in 2018, Medvedev said, adding that it was a direct result of state support in the industry.

Expansion in Russia’s processing industries also sped up last year, but it was uneven.

“The highest dynamics of growth were registered in sectors that combine a good export potential with demand for modern technologies, like the car, shipbuilding, pharmaceutical industries and others,” he said.

Production of heavy and power machines went up by 4% last year, and the machine-tool industry rose by almost 17%. The car industry gained 14% in production and 12.4% in sales last year, while car exports increased 11.3% in physical terms, he said.

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