UPDATE2: Nabiullina: Cbank has room for further reduction of key rate

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MOSCOW, Jul 13 (PRIME) -- The Russian central bank has the possibility of further reducing the key rate, Chairwoman Elvira Nabiullina said on Monday at a meeting of the financial market development committee at the Federation Council, the parliament’s upper house.

“Data that we have collected after our latest decision on the key rate, data for June and the beginning of July in the first place, shows that we still have some room for a further reduction (of the rate),” she said.

In June, the regulator reduced the key rate by 1 percentage point to 4.5% annually, setting a new record.

Nabiullina also said that the central bank has no plans to redenominate the ruble.

“We have never considered any redenomination or monetary reforms. Everything is fine with both face values and…banknotes. There are no reasons to change anything here,” she said.

She added that Russian banks have restructured loans worth 4.3 trillion rubles since the beginning of the pandemic. The central bank eased some regulations that allowed banks to restructure loans under credit holidays and under individual programs without creating additional reserves.

“The easing covers 85% of the credit portfolio, and loans worth almost 4.3 billion rubles have been restructured,” she said.

Russia’s mortgage lending slowed during the pandemic, but has already started returning to growth, Nabiullina also said.

“The mortgage lending slowed down during the pandemic, like other types of lending, but it is returning to growth, and thanks to, on the one hand, a general decrease, general decrease in interest rates and regulatory exemptions – we took special measures for the mortgage. On the other hand, of course, (thanks to) the state program of preferential mortgages, under which loans worth more than 100 billion rubles were issued in June,” she said.

Around half of the new mortgage loans were issued under the preferential program, she added.

Nabiullina also said the central bank does not expect a deficit of liquidity of Russian banks in the near future.

(71.2298 rubles – U.S. $1)

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