• 12 Neglinnaya Street, Moscow, 107016 Russia
  • 8 800 300-30-00
  • www.cbr.ru
What do you want to find?

Statement by Bank of Russia Governor Elvira Nabiullina in follow-up to Board of Directors meeting on 22 March 2024

22 March 2024

Good afternoon,

Today, we have made the decision to keep the key rate at 16% per annum.

Current price growth slowed down notably in December and January. The deceleration paused in February, but, according to preliminary estimates, resumed in March. Nevertheless, for the moment, it is premature to judge the pace of future disinflationary trends. Besides, we still consider it necessary to maintain tight monetary conditions for a long period. This will help bring inflation back to 4.0–4.5% by the end of this year and stabilise it at the target further on.

I would now dwell on the reasons behind our today’s decision.

Firstly, as regards inflation.

According to our estimates, underlying current price growth has been in the range of 6.0–7.0% in annualised terms since the beginning of the year. In contrast to the autumn months, this is already not a double-digit pace, but still considerably above 4%.

After two months of slowdown, core inflation increased in February. It measures the growth rate of prices for the consumer basket components characterised by lower volatility. The accelerated rise in consumer basket prices in February was caused by high seasonal growth in demand for tourism services. This factor excluded, core inflation would not have increased. Nevertheless, prices for other market services, such as personal and medical services, as well as transportation, were growing more quickly than the overall price index. Generally, faster price growth in services is one of the indicators of high demand.

According to the data available, during the first weeks of March, price growth slowed down again. However, these figures are calculated for a limited sample leaving out the goods and services that notably contributed to price growth in winter. Therefore, it is still too early to judge the pace of disinflation in March.

Inflation expectations are an additional factor fuelling consumer demand. Although households and businesses have generally lowered their expectations in recent months, they remain high. Moreover, expectations in retail even rose slightly in March. The slowdown in inflation will be gradually decreasing inflation expectations.

Secondly, the economy.

After a slight deceleration at the end of 2023, according to our estimates, the growth of economic activity has sped up again, primarily in household consumption. Growth in retail is a sign of elevated consumer demand. Consumer sentiment is close to record highs. Households’ propensity to make large purchases has been increasing since December. We never observed such trends during the previous periods of considerable monetary policy tightening.

Investment activity has hit a record high. Although we have not yet received quarterly data, this is evident from indirect indicators. The output of investment goods has reached historically high levels. The import of investment goods has been expanding. Finally, our regional branches report a higher percentage of companies that have increased their production targets. The economy is in the investment phase of growth, which is one of the manifestations of the structural transformation.

All this supports high business activity. The Business Climate Index rose to its 12-year maximum. Such a significant increase is associated with the fact that the economy is using almost all production capacities and labour resources. Surveys show that the utilisation rate of production capacities reached a record high of 81% at the end of last year. This trend was registered in many regions. More details about the state of production capacities are available in the March issue of our Regional Economy report.

Labour shortages remain a significant constraint on a further expansion of output. The seasonally adjusted unemployment rate declined to 2.7% in January. The labour market tightness has started to increase again. According to business surveys, the labour shortages have worsened the most in metallurgy, the pharmaceutical and chemical industries, as well as the mining and quarrying sector. Companies’ competition for labour resources has been intensifying in such conditions. Usually, this does not result in a considerable expansion of the output of goods and services, but rather provokes price increases.

In general, there is still a gap between demand and supply. The growth of the economy surpasses its potential, which is evident from persistently high inflationary pressures.

Thirdly, monetary conditions have been tightening further.

Credit and deposit rates are on the rise. This reflects the markets’ adjustment to the prior key rate decisions. Yields of federal government bonds have increased by approximately 1 percentage point since the previous Board meeting. This is partially attributable to expectations that tight monetary conditions will be maintained for longer. Expectations for fiscal policy also have a certain impact on OFZ yields.

The increase in credit activity has been decelerating, albeit unevenly. On the one hand, the expansion in corporate lending was moderate over the first months of the year. Alongside tight monetary conditions, this might be associated with advance payments under state contracts. Mortgage lending contracted slightly year-on-year. On the other hand, the retail loan portfolio is still growing rapidly, although slower than in autumn.

The saving ratio remains high as well. The increase in deposits significantly surpasses normal seasonal dynamics, which is largely driven by higher incomes. We are currently observing a rather unusual situation when the surge in savings is accompanied by growing consumption. We expect that, in the future, the accumulated effect of tightening monetary conditions encourages people to save even more, which will contribute to a more notable deceleration of inflation.

Now, I would like to speak of external conditions.

The situation in the world economy has continued to improve in both service and industrial sectors. As a result, prices in commodity markets have started to grow, which will support Russian exports.

Overall, the balance of payments is in line with our forecast. After the decline at the beginning of the year, exports have been rebounding, driven by the increase in oil prices. However, secondary sanctions hinder this process. Amid high domestic demand, the growth rate of imports remains elevated. Our monetary policy will contribute to a more balanced expansion of imports that would match the exports potential.

I will now speak of risks. As before, the balance of risks is shifted towards proinflationary ones.

The situation in the labour market is still among such risks. If labour shortages intensify further, the growth in labour productivity might lag behind the rise in wages even more. This might additionally exacerbate the imbalance between demand and supply dynamics amid high utilisation of production capacities and labour shortages.

Moreover, it might become increasingly difficult to meet elevated demand through imports. An expansion of imports requires higher exports, while the potential to ramp up exports is limited.

As to the factors that might speed up disinflation, these are a rapid slowdown in demand growth, as well as an increase in the economy’s potential following the transition to the investment growth model.

Another factor that will influence the forecast is a possible adjustment of the medium-term budget parameters following the Presidential Address. When the Government presents particular parameters of novelties, we will be able to estimate their effect on the economy and inflation.

Winding up, I would like to comment on monetary policy prospects.

To ensure a sustained return of inflation to the target, we need to maintain tight monetary conditions for a long period. The major factors influencing the choice of a further key rate path, including a possible transition to its decrease, are inflation dynamics and the balance of risks to the inflation forecast. What are the criteria that would show that the pace of disinflation is sufficient? In the first place, these are the steadiness and pace of the slowdown in current inflation. Another important factor is inflation expectations. In addition, a more balanced rise in consumer activity, lending and imports, as well as an easing in the labour market will also evidence a sufficient rate of disinflation.

The main aspects of the discussion that preceded the vote on our today’s decision will be detailed in the Summary of the Key Rate Discussion to be released on 1 April.

Thank you for your attention.

Q&A for the Media

QUESTION from Interfax:

The tone of the statement remained unchanged overall. Does this mean that the key rate reduction will most probably start in the second half of the year or is there a chance that this might happen, let’s say, in April following the Board of Directors’ meeting? My second question is about the situation in the fuel market as there are poorly predictable factors that are currently impacting this market. How strongly might this situation affect inflation, inflation expectations and, accordingly, the Central Bank’s monetary policy in the near future?


Indeed, we were discussing the path of the key rate. It will become possible to start cutting the key rate after we receive sufficient evidence of a really steady deceleration of inflation. At the moment, we consider that this will most likely happen in the second half of the year.

As regards your second question, of course, we are monitoring the situation in the fuel market, but it is essential to analyse the totality of factors to forecast inflation. Currently, we would not say that the situation in the fuel market might considerably influence our inflation forecast.

QUESTION from TASS Agency:

What were the options of the key rate decision that the Board of Directors discussed today? And question two, please. The European Commission proposed using profits from frozen Russian assets to provide aid to Ukraine. If this proposal is supported, will the Bank of Russia be able to employ any instruments to respond to such a decision and, if you do have such instruments, what are they?


During today’s discussion, we had a broad consensus that the key rate should be kept unchanged. We did not discuss any other options actually. We discussed in detail a possible key rate path and the signal regarding the key rate as there were both opinions that the deceleration of inflation was already becoming steady and opinions that inflationary risks had risen. Accordingly, we were discussing various alternatives. Nevertheless, the majority said that we should maintain the current neutral signal regarding the key rate, and we actually had a consensus on this issue.

Speaking of the European Union’s actions with frozen assets, if such a decision is made, we will be taking appropriate response measures to protect our interests.

QUESTION from the Bankiros.ru financial portal (Nizhny Novgorod):

Some experts have been criticising the key rate increase saying that a high key rate is not combating inflation, but is rather pushing costs higher, slowing down the economy and hampering the development of the industrial sector. Is this true? When will it become possible to start cutting the key rate? And question two, please. Will the Bank of Russia be containing the decline in the ruble exchange rate against the US dollar? What are the measures that are currently used to do this and are you planning to introduce any new ones?


As regards the effect of the key rate increase, a high rate is really combating inflation and the net effect of the key rate increase is definitely a slowdown of inflation. As regards the factors hampering the development of the industrial sector, this is exactly high inflation. Investment is much more strongly influenced by inflation expectations rather than the current level of the key rate as they are taken into account in long-term credit rates. Accordingly, when inflation is high, loans, especially long-term ones, cannot be affordable.

I would like to reiterate that credit is not the main source for financing investment. Globally, the main source is companies’ equity, reinvestment of profit. Credit is just an additional resource for growth. There are many companies that are successfully developing without any debt financing. By the way, we can say that companies now have more opportunities to use their equity as the overall financial performance in the corporate sector is sufficiently high.

Another aspect that we have always been talking about is that cheap loans would now be almost useless for expanding production since the major constraints today are associated not with credit but with labour resources and production capacities. Indeed, low credit rates might increase nominal demand for both investment and consumer loans. However, when the economy lacks available resources, credit would not help expand production but will only be pushing up prices. Accordingly, in both the medium and long term, the key rate increase will be slowing down inflation and businesses will be able to rely on longer-term factors that will help them make investment plans and promote favourable conditions for the development.

Speaking of the exchange rate, its fluctuations combined with other factors are definitely influencing inflation and might urge us to take certain actions if a particular factor is obviously preventing us from achieving our inflation target. In turn, we are also influencing the ruble exchange rate through the key rate as its increase makes savings in rubles more attractive and contains excessive demand for imports thus dampening the pressure on the exchange rate. The effect of our monetary policy as well as changes in the balance of trade are the main determinants of the exchange rate. Nevertheless, our major objective is to decelerate inflation and achieve the announced target of close to 4%, rather than a certain level of the exchange rate. The latter will be at a level that is needed to help achieve the inflation target of close to 4% by the end of the year. It might vary depending on the combination of factors in foreign trade. As we have already said several times, monetary policy that ensures price stability also helps stabilise the exchange rate.

QUESTION from the Bitkogan project:

Is the Bank of Russia ready to possible sanctions against Moscow Exchange and Central Counterparty National Clearing Centre (CCP NCC)? How will foreign currency trading be organised in the case of such sanctions?


Of course, we are in a situation when we should always be ready for a potential toughening of the sanctions, including against the infrastructure. We are considering various alternatives with the exchange so as to ensure the functioning of our infrastructure. Therefore, we are certainly discussing such measures in advance.

QUESTION from Argumenty i Fakty:   

Is the Central Bank using its reserves to prop up the ruble exchange rate? If yes, how is this influencing the key rate path? And question two, please. What is the Bank of Russia’s view about a possible increase in personal income tax or corporate profit tax — is this a disinflationary or proinflationary factor for your forecasts?


No, we are not using the reserves to prop up the exchange rate. This is obvious from the statistics on the gold and foreign currency reserves, by the way. All changes in the gold and foreign currency reserves are associated with fiscal rule-based operations and revaluation. The ruble exchange rate is floating. Accordingly, we do not take any special measures to keep it at any particular level. The high key rate that you can see now is aimed at decelerating inflation. Since February 2022, we have not been conducting any interventions in the foreign exchange market using our reserves, except for fiscal rule-based operations. In February 2022, this was necessary due to financial stability risks, whereas there are no such risks today and thus we do not need such interventions at the moment.

The key rate is affected by the entire complex of internal and external conditions. Depending on how these conditions will be evolving, the level of the ruble exchange rate that would ensure the return of inflation to the target might vary.

Speaking of the impact of possible tax modifications on inflation and, accordingly, our decision, we do not analyse each factor for each tax separately as what is critical to us is the overall configuration of fiscal policy, the structural budget balance, the structural budget deficit. Of course, the configuration of taxes might influence the situation, but this factor is much less important. Today, it would be premature to give any estimates. We will make them after the Government presents particular proposals.

QUESTION from the A42.ru online newspaper (Kemerovo):

In his Address to the Federal Assembly, the President spoke on a range of social programmes, both new and renewed ones. How will the expected rise in government expenditures be influencing inflation?


Indeed, we do factor in fiscal policy, the path of fiscal policy normalisation when making our key rate decisions. However, this is not just additional budget expenditures that we need to consider. It is essential to bear in mind the sources of financing these expenditures and the overall configuration of the budget. As I have already said, we will be able to give an estimate after the Government announces specific proposals.

QUESTION from Moskovsky Komsomolets:

The Bank of Russia has kept its inflation forecast for the year-end unchanged at the level of 4.0–4.5%, while the slowdown by 18 March reported by Rosstat was minor compared to 11 March, namely 7.71% vs 7.73%. Could you please comment why the Bank of Russia has been keeping its forecast unchanged, considering that the increase in the housing and utility tariffs is scheduled for 1 July? Moreover, the Russian economy is vulnerable to black swans, such as the breakdown of up to one-third of oil refineries, and who knows what other surprises.


I would first answer the question about annual inflation and the figures that you’ve mentioned. I would like to stress that annual inflation is a lagging indicator, that is, it shows the inflation rate over the past 12 months, whereas, making our decision, we rather focus on current inflationary pressure, current inflation, including seasonally adjusted measures, the measures of underlying inflation. We believe that our monetary policy will really slow down the inflation rate close to the target of 4.0–4.5% by the end of the year. Keeping this in mind, we estimate particular monetary policy measures required. Indeed, inflation is currently decelerating. However, we need to assess how steadily it is slowing down and whether the current pace of disinflation, the slowdown of inflation is sufficient to achieve the target. Depending on this, we will be adjusting our monetary policy if needed.

This is true, the housing and utility tariffs may increase in summer, and we take this into account in our forecast. This might cause a local rise in the current inflation rate, but generally the monetary policy stance that is currently ensuring tight monetary conditions is aimed at slowing down inflation.

As regards black swans, such risks always exist. However, we’ve got the baseline forecast and, if there are any risks or shocks — by the way, we are always talking about risks, and there might certainly be both risks and shocks — we will analyse what decisions will be needed depending on the scale of such unexpected events.


Currently, the calculation of annual inflation mostly factors in the price growth rates of 2023, specifically the very high price growth rates observed from July through November 2023. In December 2024, these growth rates will drop out of the calculation of annual inflation and its rate will show only the price increases from January through December 2024. The seasonally adjusted price growth rates of January—February 2024 are already lower than 7% in annualised terms.

QUESTION from TV channel NTV:

At the end of February, the Bank of Russia revoked QIWI Bank’s licence. Obviously, a lot of people had been using electronic wallets to pay for purchases abroad. Currently, Russians do not have many options to do this. Did not the Central Bank consider the possibility of financial resolution instead of the licence revocation?

And question two, please. Over the past month, the Bank of Russia revoked licences from three banks, whereas it had not been revoking any licences during the preceding 18 months. Mass media report that this might actually be the end of the moratorium on licence revocations. Did such a moratorium exist and should we expect any other revocations?


The option of credit institutions’ financial resolution may be considered primarily in relation to important credit institutions facing financial stability problems, a deficit of capital, and solvency issues. The Bank of Russia revoked QIWI Bank’s licence not because it was financially unstable but exactly because it was involved in large-scale suspicious transactions. This decision was the result of our supervisory work. QIWI Bank was not an important credit institution and, accordingly, there were no grounds for its financial resolution, in our opinion.

As to licence revocations, our work is targeted. The revocation of a licence is indeed an extreme measure preceded by systemic work and orders we issue to banks. Therefore, this is a targeted decision. We are closely monitoring and supervising the situation in particular banks. There has never been such a moratorium. However, if a bank fails to rectify the situation, or its problems are caused by a deficit of capital, or its extensive involvement in dubious transactions, we do make such decisions.

As regards new revocations, we do not forecast them. Such decisions depend on the results of our supervisory work.

QUESTION from the Drug dlya Druga weekly (Kursk.ru):

The high key rate has not yet helped significantly decrease the demand for goods that households usually buy on credit. As of the end of January—February, the number of new car loans hit a record high. How does the Bank of Russia assess these trends and why has not the transmission mechanism been producing the desired effect?


The transmission mechanism is working and we do see its effect, including in the dynamics of lending, although the trends are uneven in terms of both segments and time. Nevertheless, the growth rates in lending are really decreasing. I would like to reiterate that it takes from three quarters to maybe 18 months for monetary policy decisions, the transmission mechanism as we say, to produce the desired effect. Furthermore, we expect the effect of last year’s key rate increases to reach its peak in 2024 Q2.

By the way, the key rate has influenced car lending as well. The average market interest rate has risen in this segment, but the matter is that the situation in car lending is an exception. The car lending market is rebounding after the decline. Indeed, the number of car loans issued by banks in February nearly doubled year-on-year. Another reason was the renewal of government support measures, and thus the demand for cars purchased on credit was growing despite the key rate increase. In addition, the expansion of car lending was also driven by dealers’ readiness to sell the stocks imported before the rise in the recycling fee. Therefore, all these factors have certainly influenced the situation in car lending.

QUESTION from Reuters:

Is there already a final decision concerning the President’s Executive Order, effective through April, that obliges exporters to sell foreign currency earnings? Will it be extended and, if yes, for how long?


I have no information about this. Our opinion on this issue is well-known. I would not repeat it again.

QUESTION from RIA Novosti:

Can we say that inflation in Russia has passed its peak?

At the beginning of March, you said that insurance coverage might be expanded to balances in people’s electronic wallets and this issue was under consideration. Are there any particular options already to address this issue? What is the Bank of Russia’s opinion about the amount of such insurance coverage? Are you considering any options to expand insurance coverage to any other instruments and, if yes, what are they?


As regards the peak of inflation, in our opinion, the peak of current inflation was passed in autumn. The peak of inflation in annualised terms might be in the second quarter considering that annual inflation measures the price growth rates over the past 12 months and includes the base effects. However, we believe that the peak of current inflation, current inflationary pressure has already been passed.

Speaking of insuring electronic wallets, we are currently discussing the types of e-wallets that may be insured. According to preliminary estimates, it would be reasonable to insure balances in the e-wallets that have gone through the identification process as this is necessary to identify the compensation recipient. The balances of funds in such personalised e-wallets are larger than those in anonymous ones, but these balances are still quite small. We believe that the total limit of insurance compensation amounting to ₽1.4 million, just as for banks, is more than enough to protect clients’ funds. Therefore, in our opinion, it would be reasonable in this situation to expand insurance coverage to balances in e-wallets as well.

As to other instruments, I would like to remind you of the protection of funds in individual investment accounts. The relevant draft law was submitted to the State Duma. Furthermore, in the near future, we are going to present our initiative to banks, deputies and the Government that provides for increasing the limit of insurance compensation for ruble-denominated irrevocable savings certificates, long-term deposits, and escrow accounts and, simultaneously, for reducing the rates of insurance premiums for them paid to the Compulsory Deposit Insurance Fund. This is another initiative.

QUESTION from the Invest Future project:   

My first question is about the consolidation of the banking sector. Does the Central Bank see any risks in this regard? The second question is as follows. Will the exchange of investors’ blocked assets influence the ruble exchange rate and, if yes, how?


As regards the consolidation of the banking sector and possible effects, we believe that this will increase competition among the largest banks and, accordingly, they will be offering better services to people and businesses on more competitive terms.

Speaking of the potential impact of the exchange of blocked assets on the ruble exchange rate, there will be no notable impact, in our opinion. If such exchange takes place, people will be able to use their funds in rubles from the earlier blocked accounts. Technically, part of this money might flow to the foreign exchange market, but we consider that interest rates on ruble deposits are much more attractive now, that is, high interest rates are making bank deposits more attractive as a store of value compared to investment in foreign currency.

QUESTION from the Slozhny Protsent project:

Inflation expectations remain unanchored and, the more so, this is true for all groups. Even the analysts surveyed by the Bank of Russia for its macro forecast expect inflation to equal 5.2% as of the end of the year, which is 0.7 percentage points higher than the upper bound of the Central Bank’s current forecast. Expectations among businesses and especially households are much higher. What do you think about the reasons why inflation expectations stay unanchored despite inflation targeting, while, in autumn, the Central Bank will have been pursuing this strategy for 10 years already? Is the Bank of Russia considering any new measures or instruments to anchor inflation expectations?

The second question is about the exchange of blocked assets. From Monday, Russian investors may apply for participation in this programme. It is supported by the Russian Ministry of Finance and the Central Bank. However, western depositories and regulators as well as depositories reporting to them, on the other part, have never declared, at least officially, that they are ready to support this procedure. How real is this asset exchange procedure, in your opinion?


Indeed, inflation expectations remain unanchored. This is a matter of concern to us, including both their elevated level and the fact that they are still unanchored. They are high and unanchored now due to high inflation that has been deviating from the target for a long time. As to possible measures, the only one is to slow down inflation, to steadily decrease inflation to our target of close to 4% and maintain it at this level.

As we said earlier, to anchor inflation expectations, we need to ensure that inflation stays close to the target for a long period, in the first place. Secondly, market participants should have an experience when they comprehend that, when inflation starts to accelerate for external reasons, for other reasons, the Central Bank is pursuing the policy aimed at decelerating inflation. This is the key.

Nonetheless, I would like to stress and we can already see that inflation has been slowing down and inflation expectations have been decreasing as well among both companies and households. However, their level is still rather high and it is higher than in 2017–2019 when the inflation rate averaged about 4%. In other words, inflation expectations are higher than the level needed for inflation to go down and stabilise at 4%.


The level of medium- and especially long-term interest rates in the economy depends exactly on inflation expectations. Accordingly, the only way to achieve a moderate level of interest rates is to ensure low and anchored inflation expectations, which is possible only by maintaining actually low inflation.


As regards the unblocking of assets, we have been saying from the very beginning that we are creating opportunities for this. However, this process is voluntary on the part of both residents and non-residents. Therefore, the bidding rules provide for two scenarios, specifically when deals are either made or not. The withdrawal of securities from their holders’ accounts will only be possible if the deals are made. We will be monitoring how high the demand for this instrument will be. I would like to reiterate that our objective was to create the conditions enabling the parties to use this instrument.


Today, the Arbitration (commercial) Court of the Perm Territory published the ruling on the withdrawal of shares from private investors, specifically Solikamsk magnesium works’ shares, that is, the shares that investors had acquired on the exchange, which should be deemed to be a fair purchase. Does the Bank of Russia see any problem in this regard and the need to establish an additional mechanism that would protect private investors in such a situation and, if yes, what mechanism could ensure such protection?

My second question is about QIWI Bank. Does the Central Bank has any financial claims to QIWI Bank’s former owners and, if yes, to whom exactly and how large is the amount of these claims?


As regards the withdrawals of shares from minority shareholders that they purchased in on-exchange trading, such cases are certainly a matter of concern to us since this is a critical factor affecting retail investors’ confidence in the equity market. If we wish to raise resources for the development, including to use the opportunities of the capital market, it is crucial to preserve this confidence. This situation is a matter of concern to us. We’ll see what else we can propose, in the first place in terms of laws.

As to filing claims against QIWI Bank’s former owners and executives, according to law, the Central Bank may file financial claims against former owners and executives in the case of a bank’s financial resolution when we allocate funds for this financial resolution. In the case of a bank’s bankruptcy, its owners may be brought to subsidiary liability. As you know, we used these options. QIWI Bank’s licence was revoked due to repeated violations of anti-money laundering laws. Therefore, a short while ago, we filed a suit to the commercial court for the bank’s forced liquidation. The provisional administration of the Deposit Insurance Agency concluded, following its work, that the bank had a sufficient surplus of funds exceeding ₽28 billion, that is, the bank’s assets were larger than its liabilities. Therefore, we consider that all the existing obligations will be fulfilled.

QUESTION from the Fomag.ru project:

I’ve got two questions related to the President’s instruction. The first one is about subsidised mortgage lending. The President said that the subsidised mortgage lending programme would remain effective. How will the Central Bank be able to tailor the subsidised mortgage programme so as to avoid a negative effect exactly on the growth rates of mortgage lending?

The second question is about the President’s instruction to increase the equity market twofold. How can this be done and what can be used for this? What might this instruction imply?


As regards subsidised mortgage lending, our view is that the extensive non-targeted programme should expire in summer and should not be extended. We have been always supporting targeted programmes, including Family Mortgage. However, the configuration of these subsidised programmes is the remit of the Government. We will factor in these decisions in general when making our key rate decision. We do not analyse each market separately — what is essential for us is how lending amounts are affecting the opportunities to achieve the inflation target.


It is critical for us to ensure that lending growth rates and the demand for credit are responsive to changes in the key rate and monetary policy. Therefore, such programmes providing for a pre-set interest rate for ultimate users should certainly be limited in terms of their amounts. Otherwise, the sensitivity of credit to our policy is simply weakening.


Speaking of the twofold expansion of the Russian equity market, I believe that this is not just possible, but is actually necessary because the potential of the equity market today is not used to the fullest extent to both develop the Russian economy and meet people’s needs for the diversification of their savings and investments. We can see that, as the situation stabilises, businesses’ demand for capital market instruments is rebounding, that is, companies are becoming more interested in raising funds in the capital market. The amounts of both the bond market and the equity market are growing. Today, the size of the corporate bond market already exceeds ₽23 trillion. The capitalisation of the equity market is more than ₽60 trillion. There were 12 initial and secondary public offerings last year. This is actually the highest value for the domestic market over the past decade. Thus, we can see that there is the demand and we expect that this process will be supported by many programmes, including the programme of subsidies for high-tech companies, fast-growing high-tech SMEs. These programmes involve measures for supporting pre-IPOs, subsidies for listing on the exchange, and grants to small innovative businesses. All this will support SMEs’ opportunities to enter the equity market.

In addition, it is possible to consider tax easing in this case, but this issue should be discussed with the Ministry of Finance. To achieve this, to promote the expansion of the equity market at a realistic and sufficient pace, it is certainly essential — and I have been always repeating this — to ensure investors’ confidence in this market, information disclosure, and the protection of minority shareholders’ rights. This requires comprehensive and meticulous work, but this is totally achievable.

QUESTION from Kommersant:

As you said, the growth rate of imports remains elevated. What are your expectations for March and the next few months? Is it possible to say that the effect of, roughly, the tightening of the sanctions has turned out to be not as significant as expected in January—February?

My second question is about differences in the statistics released by the Central Bank and the Federal Customs Service (FCS). The figures in the balance of payments differ from the FCS’s data, for instance, for January. What are the reasons for such a divergence?


Speaking of imports, the dynamics of imports are affected by various factors, including the existing difficulties in logistics and settlements, the sanctions of course. In our opinion, the dynamics of imports are largely influenced by the elevated domestic demand for imports in ruble terms. Currently, we can see that the key rate is producing the effect here as well, imports have stabilised, but the effects will continue to manifest themselves.


As regards the level of imports, as far as I remember, it is even slightly lower than in 2023 H1. In other words, imports have decreased and remain at this level today. Accordingly, we are not characterising imports as elevated. Actually, our monetary policy is preventing excessive growth in imports, including through the export opportunities that we currently have.

As to the divergence in the figures of the FCS and the balance of payments, these are different data series. The FCS’s data are an essential part, the prevailing part of the statistics that are ultimately included in the balance of payments. However, the balance of payments is then recalculated taking into account a number of additional transactions. For instance, if Russian fishers catch fish in the ocean and sell it in a foreign seaport, this will be part of exports according to the methodology of the balance of payments, but this will not be part of exports to be included in the FCS’s statistics as this fish has not been transported through the customs posts of the Russian Federation, and so on, there are many such details. Nevertheless, the trends are certainly identical and are mainly determined by the figures included in the FCS’s statistics.

QUESTION from the TT Finance online portal (Saint Petersburg):

The large-scale subsidised mortgage lending programme is to end on 1 July. The Bank of Russia has been repeatedly saying that it supports more targeted programmes. What is the Central Bank’s understanding of appropriate terms of subsidised mortgage lending? Whom should it be targeting in the first place and what will happen in mortgage lending in general after 1 July, in your opinion?


Indeed, we support targeted subsidised mortgage lending programmes. In our opinion, government subsidised mortgage lending programmes should be targeting those people who need support in financing a housing purchase considering overall social and economic objectives or within the programmes promoting the development of particular regions. For example, Family Mortgage that we are supporting helps families with children buy apartments, that is, this programme is addressing the demographic problem.

However, the terms of subsidised programmes are established by the Government. There is also an interagency working group within the State Duma. The conditions of programmes for subsidising the interest rate are being discussed at the moment, and the Bank of Russia takes part in this discussion. When decisions are developed, we will certainly inform you about them.

We expect that such transition from non-targeted programmes to targeted ones will ensure a more balanced and sound development of the mortgage market. Indeed, the issue of new mortgages and the growth rate of the portfolio will decrease, but we still expect the mortgage portfolio to expand by about 7–12% over the year. This is quite a significant increase, especially taking into account that the mortgage portfolio has been soaring recently and is growing from a sufficiently high base. We believe that the mortgage market will reach an equilibrium growth rate of about 10–15% in 2025–2026, taking into account all new government support programmes.

QUESTION from Izvestia:

As you noted, because of rising incomes, households are able to increase both savings and consumption already now. Furthermore, despite high interest rates, banks are gradually beginning to adjust returns on deposits. As the rhetoric softens, this trend will be intensifying. Can you say that this might be hindering the achievement of the objective to increase the inflow of funds into deposits if not now, then in the medium term? How is this factor impacting your monetary policy decisions?

And question two, please. Currently, the Bank of Russia continues to revoke licences from banks involved in high-risk transactions. Besides, as we know, the Central Bank sent letters of recommendation to banks concerning control over money transfers. What recommendations did the Bank of Russia give in this regard and how is it planning to influence the fight against shadow payments that could move from QIWI Bank? Are there any new initiatives that can be implemented in this area?


Households’ propensity to save, including their desire to deposit part of their incomes, is an essential indicator that we are monitoring when assessing the tightness of monetary conditions.

Briefly, we will be closely monitoring this indicator. Of course, if we see that, because of growing inflation expectations, or persistently high inflation expectations, or any other factors, households’ propensity to save is decreasing, this will be a factor preventing us from easing monetary policy.


As regards the recommendations concerning money transfers, they are part of our efforts aimed at combating suspicious, dubious transactions. As we can see, despite the overall reduction in the amount of dubious transactions, the role of such a channel as P2P transfers, payments in these dubious transactions has increased recently. In this regard, we sent our recommendations to banks how they should act and identify such payments and what measures they should take. We will be analysing how they are doing this job and, if needed, take additional measures.

I should say that this market of dubious transactions is certainly rather mobile, constantly changing its forms. Therefore, we are analysing the entire financial market to block such channels promptly.

QUESTION from the Anna_finance blog:

Mass media reported that the Central Bank might be obliged to coordinate its decisions regarding the macroprudential limits on mortgage loans with the Ministry of Construction. Could you please explain why this is done and how will this process be implemented if the relevant draft law is approved? Are there any targets for a decrease in mortgage loan disbursements for new housing?


Firstly, the proposed macroprudential limits on mortgage loans are not aimed at affecting the overall growth rates of mortgage lending. Their aim is to reduce loans issued to over-indebted borrowers, that is, the so-called risky loans. Of course, these measures might impact the overall growth rates of lending, yet their aim is totally different.

We do not support the idea of coordinating decisions concerning the macroprudential limits on mortgage loans with the Ministry of Construction as this contradicts the status of the Bank of Russia and its mandate within the banking regulation. If the decisions on the macroprudential limits we proposed in this form are not supported, we will continue to apply the macroprudential buffers, but will simply increase them to a level that will actually be prohibitive for especially risky loans. This might involve a higher burden on banks’ capital. Nevertheless, we do have the instruments in this area and we will be using them.

We consider it more reasonable to combine these instruments, that is, the buffers and the macroprudential limits. However, if there are no limits, we will be employing the buffers. In my opinion, it is an illusion to believe that this is the use of the macroprudential limits that would decrease the growth rate of mortgage lending. It should be balanced so as not to reduce the affordability of housing to people. To ensure this, we’ve got the effect of the key rate on the growth rates of mortgage lending through the market segment and the macroprudential buffers. Hence, we will be using all these instruments.

QUESTION from Frank Media:

What growth rates is the Central Bank implying when talking of stabilisation in the mortgage market? As we can see, banks are reducing their forecasts on mortgage lending. Now, increasingly frequently, they are speaking of a reduction by 40% rather than 20% mentioned at the beginning of the year. Is the current decrease sufficiently fast, in the regulator’s opinion?

The second question is about cross-border settlements. Nearly a year ago, the Bank of Russia was saying that there was a problem of rupees stuck in accounts, after which banks were assuring us that the problem had been tackled. As far as we understand, these settlements were just partially transferred to dirhams and yuan.

However, we are now observing problems with Chinese and UAE banks. Do you see any risks in the current situation with cross-border payments for imports?

Another question about imports and exports is as follows. The proportion of rubles in the composition of payments for exports decreased at the beginning of the year. Could you please explain the reasons for this?


As regards mortgage lending, we believe that a balanced growth rate of mortgage lending this year would approximate 7–12%. However, we are not targeting growth rates of lending in any particular segment. We are rather giving a forecast when saying that 7–12% would be a balanced growth rate in mortgage lending. Compared to last year’s 35%, this would be a considerable slowdown of the increase, but this would be still a rise from the high base.

Further on, we consider that a balanced growth rate would be about 10–15%.


We are always analysing the situation in terms of the expansion of the portfolio. The figures that you’ve mentioned are rather related to the disbursements and their dynamics. Of course, compared to the growth rates of the portfolio, the sensitivity of disbursements to changes in the market conditions is much higher.

As Ms Nabiullina has just said, we still expect that the mortgage portfolio will expand by 7–12% this year, which is higher than the inflation rate.


Speaking of cross-border settlements, because of the sanctions, there are certainly difficulties with processing cross-border payments. Banks and companies are finding various ways for settlements with different countries and rather flexibly changing these ways if they start to face more difficulties.

As to India, Russian banks have been actively expanding the bilateral payment channels and are using various currencies.

Speaking of the proportion of rubles, of course, we are closely monitoring the currency composition used in cross-border settlements, the percentages of rubles and friendly countries’ currencies. These percentages may fluctuate during the year. Indeed, depending on how the situation is changing, the proportion of rubles may be fluctuating as well. Nevertheless, the overall percentage of the group that includes the use of both rubles and friendly states’ currencies has been rising. It increased in 2023 H1 and stayed at a quite stable level in the second half of the year. In early 2024, the percentage of this combined group edged up. Nonetheless, foreign trade companies are choosing these currencies depending on their preferences and opportunities to use particular payment channels.

QUESTION from TV channel CGTN:

What are today's reference points in the Central Bank’s contacts with China for this year? What are the main issues on the regulators’ bilateral agenda? In addition to the main issues that obviously include settlements in the national currencies between the two countries, have you already been discussing anything else with colleagues from the People’s Bank of China concerning the summit of BRICS, or to be more correct BRICS+, to take place in October? What would be important to discuss in autumn? Of course, there is still a lot of time before autumn, but time passes quickly.


You have already answered your own question to a great extent. Our communication certainly focuses on the development of bilateral settlements, the use of the national currencies, and the creation of the necessary conditions for this. This is our major focus. Nevertheless, we are also sharing opinions on various issues, including digital innovations. As you know, we have been promoting the digital ruble project. China is very advanced in using digital technologies in finance.

Speaking of BRICS, the issue of settlements is also essential, including the creation of a reliable system of settlements within BRICS. This is apparently the key focus.

QUESTION from Gazeta.ru:

Previously you answered that the peak of overheating in the Russian economy was in autumn 2023. Is the economy still overheated and is this a matter of concern to the Bank of Russia?

And question two, please. Recently, the Ministry of Finance urged the Bank of Russia to accelerate the process of the introduction of the digital ruble. Is the Central Bank currently observing Russians’ interest in the national digital currency?


As regards the state of the economy, we can still see signs of overheating. However, this overheating, that is, a situation where demand surpasses the capacities to ramp up supply, or as we say, the output gap, cannot be quantified. One of the indicators of the level of overheating, or the level of the output gap is the inflation rate which shows whether the mismatch exists or not.

Today, we are observing a slowdown of inflation. In view of this, it is possible to say that the peak of overheating has probably been passed. Nevertheless, the growth of demand still exceeds the potential to expand supply.


The second indicator is certainly the situation in the labour market. At the moment, companies are still talking about toughening conditions for employers, about more limited opportunities to hire additional personnel, that is, the situation has not reversed yet.


Speaking of the development of the digital ruble project, we are currently at the stage of the experiment, so to say, with a limited number of participants. At the moment, a small number of people, about 600, take part in this experiment, but we believe that we need to expand it.

As regards people’s attitude towards the digital ruble, we can probably talk about two types of perception. There are people who are somewhat sceptical or worried about everything new and people who, to the contrary, are always eager to use various innovations and wish to participate in this to a greater extent. Hence, the perception apparently varies.

Nevertheless, I would like to emphasise that we firmly believe that the use of digital rubles shall be absolutely voluntary, depending on whether people prefer to use digital rubles or not. The situation with debit cards was similar — the proportion of people wishing to use them was not very large at the beginning. We could observe that people needed time to get used to them and then started to actively switch to these cards. Now, the percentage of cashless settlements is very high among people.

Besides, we are discussing with the Treasury how digital rubles might be used in budget processes. Within the pilot testing, we are analysing the opportunities for both individuals’ and businesses’ payments to the budget and budget payments to individuals and businesses because we believe that this a possible and promising way to use the digital ruble as well.

QUESTION from Domclick:

Could you please comment on the effect of the tightened conditions of the subsidised mortgage lending programmes? Could you measure the results now, three months after the tightening?

The second question is about real estate prices. In 2023 Q4, the gap between new and existing housing prices was 44%. How large is the gap now and is it decreasing?


Speaking of changes in the conditions of the subsidised mortgage lending programmes, they did tighten. Indeed, this has helped slightly slow down the expansion of subsidised mortgage lending, but it would be premature now to speak of any exact figures as this tightening happened just a short while ago. Nevertheless, we can see that mortgage lending has decreased compared to the autumn peaks, but the figures are still higher than those recorded over the first months of 2023. The main factor will be the end of the non-targeted subsidised programme at the end of June.

As regards real estate prices, indeed, the gap between new and existing housing prices reached as much as 44% as of the end of the year. I would like to remind you that this gap had been about 10% before the launch of the large-scale subsidised mortgage lending programmes and might involve risks for people if they decide to sell their housing in the secondary market after having bought it at rather high prices in the primary market.

The statistics for Q1 will be available only in May, as far as I remember, and we will then be able to analyse how the price gap is changing. In our opinion, this gap should be contracting because of the decisions made on the subsidised programmes, but this process will not be very fast, of course, and the gap might be decreasing rather slowly.

Thank you for attention.

Save as PDF