UPDATE: Cbanker: Russian economy weathers oil price fall shock of 2014-15

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MOSCOW, Nov 22 (PRIME) -- Russia’s economy has almost weathered the consequences of the oil price fall shock of 2014-2015 and is rising at a pace close to the highest possible for its current structure, Central Bank Chairwoman Elvira Nabiullina said at a meeting of the State Dume, the parliament’s lower house, on Wednesday.

“The country’s financial system is generally stable in both banking and non-banking sectors... The economy is stable. We can and we must expand at a faster pace… we have no reason to avoid structural reforms,” she said.

The official also said that he central bank is worried about Russian people’s inflationary expectations, which are still high.

“What do we worry about? About people’s high inflationary expectations although they are declining.”

Nabiullina said that the central bank does not plan to revise its inflation target from 4% and is committed to the floating ruble policy.

“We do not plan to adjust the inflation target. A 4% level corresponds to our structure, it reduces deflation risks in some industries and prevents a sharp growth of inflation providing security to savings and investment,” she said.

“We are committed to the floating ruble policy… it helps the economy overcome external shocks more easily and be more flexible in the period of searching for a new economic growth model.”

The official also said that Russian banks will boost loan portfolios about 5-7% in 2018 and 7-9% annually from 2019.

“This is a level exceeding the growth of gross domestic product (GDP) and it will support economic development… 397 of 572 credit organizations operating in Russia as of November 1 are profitable.”

She added that the central bank hopes that banks with a basic license will support small business loaning.

Nabiullina also said that the central bank pays special attention to the bond market as an addition and extension of banking credits as well as to a higher corporate governance quality, development of the national rating industry, stricter investment rules for pension funds.

The assets of Otkritie Financial Corporation (FC) Bank and B&N Bank, which are bailed out by the central bank using funds of the Banking Sector Consolidation Fund, a newly created mechanism, are still being assessed by their temporary administrations, she said.

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