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Statement by Bank of Russia Governor Elvira Nabiullina in follow-up to Board of Directors meeting on 26 April 2024

26 April 2024

Good afternoon,

Today, we have made the decision to keep the key rate at 16.0% per annum.

Inflationary pressures have been gradually easing, while lending, consumer and investment activity remains high. It is so far impossible to say that the slowdown of inflation has become steady. Given the strong economic data, we have revised our medium-term forecast. This year, GDP will increase more significantly, and inflation will be decelerating somewhat more slowly than we forecast in February. To return inflation to the target of close to 4%, we will need to maintain tight monetary conditions for a longer period.

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

Firstly, as regards inflation.

It was considerably lower in 2024 Q1 compared to 2023 Q4. By March, current seasonally adjusted price growth had decreased to 4.5% from 6.3% in February. However, this deceleration was attributed largely to one-off factors. In particular, fruit and vegetable prices had declined notably, which is not really typical of early spring. In April, price dynamics might be higher than in March, while the overall downward trend in current price growth will remain. Most measures of underlying inflation also decreased in March. According to our estimates, they are now closer to 6% in annualised terms. Households’ inflation expectations that have been declining for four consecutive months also suggest an easing of price pressures.

Nevertheless, at the moment, we still do not observe the economic trends that are generally typical of steady disinflation. The expansion of demand still outstrips the capacities to ramp up supply. This is a significant source of inflationary pressure.

Taking into account the actual data on economic activity, the updated forecast provides for a longer path of a decrease in inflation to the target. This year, prices will go up by 4.3–4.8%. The forecast of inflation for the next two years remains unchanged at 4.0%.

Secondly, the economy.

After a slight deceleration at the end of last year, the economy again expands steadily. The growth of consumption over January—February significantly exceeded our forecast. The labour market tightness has been intensifying which reflects rising demand for labour. This trend is observed in almost all regions. For more details, see the April issue of our Regional Economy report.

Considering the current situation in the economy, in our baseline scenario, we have revised upwards our estimate of GDP growth for this year to 2.5–3.5%, while maintaining the forecast for 2025 unchanged at 1.0–2.0%. This scenario implies that, starting from 2024 Q2, the economy will be shifting towards more balanced growth rates. The demand and supply gap will be contracting gradually, supporting the deceleration of price dynamics. In this case, the accumulated effect of the key rate increase will be sufficient to bring inflation back to the levels close to the target already by the end of this year. If the situation evolves this way, it will be possible to start cutting the key rate in the second half of the year. The choice of a particular moment will depend on how quickly current price growth rates will be declining. If disinflation is too slow, we might need to keep the key rate at the current level until the end of 2024.

Another scenario that we discussed as an alternative one is possible as well. It assumes that the expansion of the demand for goods and services will continue to considerably outstrip the capacities to expand production. The signals of such overheating would be a surge in consumer activity and lending, as well as intensifying labour market tightness. All these factors would be influencing the dynamics of inflation and inflation expectations. Accordingly, if the disinflation process halts, we even might be forced to raise the key rate. I would like to emphasise that this is not the baseline scenario.

Anyway, whatever the scenario, the structural transformation of the Russian economy will continue. The surge in investment is partly associated with the recovery of the potential lost by the economy in 2020 due to the pandemic and in 2022 because of the geopolitical shock. Nevertheless, the main reason is exactly the structural increase in investment activity. This is driven by the fact that the economy now focuses more on the domestic market, whereas the share of net exports has been shrinking. High profits in the corporate sector will contribute to the growth of domestic investment. Russian companies’ overall financial performance reached nearly ₽34 trillion over the past 12 months.

Economic activity is still greatly influenced by the public sector demand, which is a guiding indicator for many companies. However, the government demand is less responsive to the key rate than the private sector demand.  This means that the key rate has only an indirect effect on part of demand in the economy. Therefore, to ensure price stability, the economy might need higher interest rates. We will update and, possibly, raise the estimate of the neutral key rate when preparing the Monetary Policy Guidelines.

Thirdly, the tightness of monetary conditions has generally remained the same since March, although different indicators have been demonstrating diverse dynamics.

Since our previous meeting, yields on federal government bonds have risen. Moreover, their growth has been more significant in the long-term segment. As a result, the inversion of the yield curve has decreased. There is no decline in the financial market activity. As a result of high profits over recent years, companies are able to raise both equity and debt financing despite tightening price conditions.

Lending continues to surge. Companies’ demand for long-term loans raised to finance investment projects remains high. The expansion in the retail segment is driven primarily by car loans and credit cards. As expected, the growth of unsubsidised mortgage lending is somewhat slowing down.

Today, we have decided to further tighten the macroprudential measures in retail lending. From 1 July, we will raise the risk-based add-ons for consumer loans with a total cost of loan (TCL) from 25% to 40%. This decision has been made in response to the evidence of riskier loans accumulating in banks’ portfolios. According to the leading indicators of credit quality, overdue debt on loans issued since October 2023 has been growing. Furthermore, from 1 July, we will introduce the first add-ons for car loans issued to borrowers with debt service-to-income ratios (DSTI) above 50%. These measures have been taken into account in our forecast and today’s key rate decision.

We have raised the forecast of credit to the economy by 2 percentage points to 8–13% for this year, having considered the actual dynamics, and lowered it by 1 percentage point to 7–12% for 2025.

Households’ saving activity remains high. As people’s incomes, including wages, are growing, households are able to both save and consume more. As a result, even though the saving ratio is rising, consumption is still surging.

Now, I would like to speak of external conditions.

The world economy continues to expand rapidly, although there are now signs of a slowdown. On average, prices for Russian exports have risen since the beginning of the year. The intensifying sanction pressure and the threat of secondary sanctions are still the main constraint on foreign trade. The need to adjust logistics and payment chains to these factors, apparently, partly became one of the reasons for a faster contraction of imports in 2024 Q1. Exports exceeded expectations, driven by an increase in the quantities of non-oil and gas exports and higher oil prices.

Considering the actual data and the growth prospects of the world economy, we have updated the forecast of the balance of payments. According to our estimates, exports and imports will be slightly higher over the entire forecast horizon than expected in February. The current account surplus this year will total $50 billion, just as in 2023, and decrease to $44 billion in 2025.

I will now speak briefly of possible risks to the forecast. As before, the ratio of risks is shifted towards proinflationary ones.

In the first place, this is persistently high domestic demand. As regards high consumer demand, the main risk is associated with labour productivity lagging further behind wage growth. With respect to investment demand, risks are related to hurdles in importing equipment, including due to new settlement issues. Acute staff shortages remain a key issue for companies in planning investment projects.

Inflation might be decelerating more quickly than in the baseline forecast if significant investments over the past two years have influenced the economy’s potential more significantly than we currently estimate.

In addition, the expected adjustment of fiscal policy parameters in connection with the Presidential Address might also have a notable effect on further dynamics of the economy and inflation.

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

The decisions to raise the key rate made last year have helped considerably weaken the persistent inflationary pressures. The effect of these decisions will slow down inflation to 4.3–4.8% by the end of this year. We are ready to keep the key rate at high levels as long as needed to ensure a steady return of inflation to the target. The forecast of the annual average key rate for 2024 and 2025 has been revised upwards. It will stay in the range of 15.0–16.0% per annum this year and 10.0–12.0% per annum next year.

Thank you for your attention.

Q&A for the Media


Did you discuss the option of raising the rate at the meeting today? According to your previous assessment, the economy has passed the peak of overheating. What is your current assessment? Are we in for another peak?


The overwhelming majority of participants in the meeting spoke for keeping the rate unchanged. At the same time, they all agreed that there was less room for a rate reduction, and several opinions were in favour of a rate rise.

As for the peak of overheating, we still believe that the overheating peaked in the autumn, but the economy overall is still overheating. The expansion of demand is still running ahead of potential supply expansion. We expect the gap to narrow under the influence of monetary policy, and this will come with a slowdown in persistent inflationary pressures.

QUESTION from Interfax:

Can your inflation forecast of 4.3–4.8% still be viewed as suggesting that inflation is close to the target, given that the middle point of this range is 4.5%? Would it be fair to say that the start of the rate reduction cycle in line with your expectations has moved from Q2 to Q3? That is, is it most likely to occur in Q3 rather than Q2?

And a question about consumer lending. Following up on your statement that you have lifted the risk weight add-ons today, many experts say that monetary policy has so far had little effect on the economy, including on lending, and are even comparing it to the Dzhanibekov effect. Do you believe that it may be time to take further measures, in particular in the area of consumer lending? One option could be an increase in macroprudential limits for Q3. Your decision is due in May.


We expect current price growth (month-on-month) to total 4% or even lower by the end of the year.

The timing of the rate reduction will depend on the pace of disinflation. Everything depends on its progress over the next few months, so we are not committing to a specific point in time such as Q2 or Q3. If disinflation processes are too slow, the key rate may well remain unchanged through the end of the year.

As for consumer lending and monetary policy, first, we do not isolate the impact of monetary policy on individual sectors, and we are just focused on its impact on overall growth in lending.

In the case of consumer loans, we are concerned about risks rather than growth rates. Macroprudential measures — including the tightening of the add-ons unveiled today and a review of macroprudential limits (which is indeed to be decided in May, and a tightening is possible) — are not related to the growth rates of consumer lending but are intended to prevent the accumulation of risks for both consumers and banks if banks reduce lending standards, and this is taking place, unfortunately.

QUESTION from Vladivostok (newspaper):

There is a feeling that indicators such as inflation and the key rate are the Bank of Russia’s highest priorities. There is a close relationship between these two indicators, like conjoined twins, with all financial policy revolving around them. But perhaps it is time to take a broader view and analyse, for example, how the level of the key rate affects economic growth and living standards? If a high policy rate stifles growth, perhaps it would be right to seek to avoid sharp upward movements. It may well be that there exist other tools to tame inflation beyond rate increases.


Like any responsible central bank, we do indeed seek to take the broadest possible view of the picture and make monetary policy decisions on the basis of macroeconomic assessments for general equilibrium in the economy.

What is the source of high inflation? High inflation is a sign that demand is rising ahead of the potential proportional expansion in supply. This means that incomes and loans are growing faster than the pace of expansion in the production of goods and services.

The toolset we have (which is influence over credit growth) can have a marked impact only on demand. There is a view that the availability of credit can quickly change the situation with supply and lead to growth in the production of goods and services. This view is consistent with everyday experience. In terms of macroeconomics, however, it is wrong. With all resources, particularly labour, fully utilised, it takes a long time to make investments in new equipment and automation and to optimise production. We see that businesses are rolling out these processes. It takes time for these investments to boost economic potential and the capability of supplying more goods and services to the market. This is a gradual process, and it is likely to take longer than just a few months, but quarters or even years.

As this process unfolds, with stubbornly high inflation, interest rates will also have to be high, putting constraining pressure on investment. Therefore, the key method of maintaining low inflation is to align demand with capabilities for expanding the supply of goods and services.

When household incomes and corporate profits grow rapidly — as fast as they are growing now — and when their contribution to demand growth is higher than usual, credit should grow at a more moderate pace, and there should be more savings than usual. This is what a high policy rate is intended for.

Contrary to the widespread view, tight monetary policy does not stifle economic growth in and of itself. In an overheating economy, any further expansion of demand (as I have mentioned on multiple occasions) results in a much more significant acceleration in inflation, instead of an increase in output.

If the key rate level is proportional to other economic conditions, a tight monetary stance has a stronger impact on the slowing of inflation than on GDP, and this is clearly seen from the Q1 data. Going by all the indicators, economic growth is holding, while price growth is down significantly compared to the second half of last year.

When instruments other than the key rate are brought up, it is usually suggested that we use two types of tools involving steering the exchange rate: a fixed rate or a managed rate. The reasoning is that inflation will not change if the exchange rate does not change. But that is wrong. The source of inflation is the mismatch of demand and potential supply. In a setting of excessive growth in demand, an artificially fixed rate will only lead to excessive and continuous growth in imports. Given that a strong rise in exports is impossible (which is the current case: exports are showing only sluggish growth, with a decline of 14% from 2021), more foreign currency is needed to fund the expansion in imports. What is the source of foreign currency other than exports? The recommendation is probably for the central bank to burn through its foreign currency reserves. However, foreign currency reserves are limited, and when the market sees a rapid decline in them, the national currency depreciates, and the depreciation is quite strong. Therefore, this path is completely unacceptable, in our opinion. The long-term exchange rate is set by the difference between domestic and global rates of inflation.

The other proposed option is the targeted issue of money for certain sectors and businesses to obtain cheap or free credit. That would lead to a deterioration of lending conditions for the rest of the economy, which would have to bear the costs.

This is why the key rate is, in our view, the operative and most important instrument.

QUESTION from Fomag.ru:

Certain experts are discussing the phenomenon of a salary revolution in a number of sectors. According to them, this salary revolution in a few sectors is a determining factor for other sectors. The question is: what are the implications for overall inflation? How is this expected to unfold moving forward, and how does it need to be approached, if at all? Perhaps no action is needed, and this phenomenon will just be adjusted by economic conditions.

The second question is about annual inflation rates. Is there much chance of current annualised indicators holding at about the same level by the end of the year, or is this a totally unlikely development?


With regard to the first question, it is correct to analyse the labour market as a whole, given that the growth of salaries overall reflects a shortage of labour. This is evident across a number of growing sectors. These are primarily those delivering on import substitution and infrastructure projects, among others. That is, whenever there is demand, there is a real shortage of labour and an increase in wages.

Incidentally, according to recent business surveys (covering about 15,000 companies), 70% of respondents report labour shortages. Therefore, in our view, it is important to look at the labour market, but there are, of course, long-term trends which affect it, including demography. It is a source of inflationary pressure when productivity lags behind wage growth.

Speaking of annual inflation rates, we have released a year-end forecast: 4.3–4.8%. Current inflation is also set to decline.

But the annual numbers in question are inflation over the past 12 months, and there was a period — the second half of last year — of quite high inflation. Therefore, in making assessments of inflationary pressures, we are guided less by annual inflation than by seasonally adjusted month-on-month data, that is by the persistent factors. Annual inflation is more important as a retrospective indicator spanning several years and enabling us to see how close inflation is to the target.


Hypothetically, if annual inflation were to sit at around 7%, it would mean that persistent inflation were not slowing, and that it was 6–7% in the January to February period and would remain at 6–7% throughout the year. What would that mean? It would mean that the key rate of 16% was not ensuring the slowdown of inflation and its return to 4%. If that were the case, then in February, in March and today, we would have raised the rate.


We are seeing a decline in persistent inflation. It is especially strong compared to last year's peaks, and even this quarter, inflation is declining. While our previous estimate put it at 6–7%, most indicators now show that it is about 6%. This suggests that persistent inflation is declining.

QUESTION from Kommersant:

Your estimate for imports is significantly lower than the Ministry of Economy’s, and, notwithstanding the adjustment of GDP growth and consumer activity growth, there is a very slight upward revision of the forecast for imports. What is the reasoning for this adjustment? Does it reflect only increased sanctions pressure, or are you pricing in any other factors?


Imports are primarily driven by domestic demand, and imports have recovered quickly. The strong growth came on the back of high domestic demand. The rate increase put constraining pressure on imports. The developments in March are rather the result of payment difficulties, which are slower, but the continued effect of the rate also remains.


Going by the available data on Q1 imports, yes, there are circumstances explained by further sanctions pressure, which will hopefully be temporary. On the other hand, there are longer-term effects that are related to options that are much less available than before 2022, both in terms of consumer imports and especially investment imports. Therefore, trends in the structure of imports over the forecast horizon are explained by the significantly lower ratio of imports to GDP than before 2022. Even the presidential address included guidelines for future imports in support of these arguments.

QUESTION from Bitkogan Project:

Suppose that the current exchange of an asset worth up to ₽100,000 is successful and goes according to plan. When can we expect future asset exchanges with higher limits, and what is to be done to make this happen?


Under the decree, asset exchanges are currently limited to assets of ₽100,000. We will wait and see how it works with small amounts. We are protecting the interests of investors with small stakes, but there are many such investors. We just have to see how it goes, and then we can discuss the issue.

QUESTION from Slozhny Protsent Project:

Why was it only at the end of April that the ruble began to strengthen in response to the balance of payments surplus, which had reached a record high in several months? Also, a major capital outflow of $15 billion was recorded in March. How closely related is the ruble exchange rate to the growing debt of the buyers of Russian exports? If it is related, perhaps the mandatory sale of foreign currency revenues by exporters should be maintained?

Now, the second question is about the conditions for easing monetary policy. Your summary defined four such criteria: inflation, slower lending growth, a less tight labour market and the absence of external shocks. Yet, it is hard to imagine that all four criteria will combine in the foreseeable future to pave the way for a rate reduction. In theory, could the Bank of Russia implement the rate cut in small steps of perhaps 50 basis points each if only two or three of the criteria are met? Or perhaps it is appropriate to wait until all the criteria are met, as in 2015 or 2022?

Are there any plans to revise this list of conditions in any way? If there are, why? If there are no such plans, when do you think these four criteria will enable a switch to a markedly softer monetary stance?


Let me first answer the second question. This list should not be approached mechanically. We seek to explain which factors and dynamics are of particular importance to us. The list of such factors may be updated if, for example, other significant inflation risks emerge.

In our opinion, the conditions in the list are relevant and achievable. We will look at the pace of development and will analyse the behaviour of the indicators. This work is related to the professional judgment of the Board members.

In general, we believe that communication about such conditions is important to explain the key factors we are focused on.

As for the balance of payments, first, this is probably about the current account surplus, seeing that the balance of payments is balanced. It is true that foreign currency flows are out of sync with the statistical records of imports and exports. We know that both imports and exports are registered upon crossing the customs border. However, payment for exports takes place when, for example, the tanker has made it to the port of destination. In the overwhelming majority of cases, delivery timeframes are up, as are the timeframes for payments.

This has increased the lags between the times when exports and foreign currency revenues are recorded. This lag is now estimated to be about one to two months, two months in most cases.

Because of this, the exchange rate movements in March were determined by the exports of January and perhaps even December. The increased exports in March will impact the supply of currency between May and June.

It is the other way around with imports. That is, current deliveries are pre-paid, more often than before. The foreign currency must be bought and sent first, and the goods come after. These lags should be taken into account. Therefore, it is not really correct to link the monthly values of the current account surplus with the exchange rate at this time.


Let me emphasise that these lags are not the result of delays in payments, but are simply due to longer timeframes for logistics and payments.

You are absolutely right: in fact, the reflection of these lags in balance of payments terms is a change in receivables and trade credit that is recognised in the financial account. Further to the Governor’s reminder, the balance of payments must be balanced even if the currency flows are out of sync with the flows of goods.

QUESTION from Reuters:

I would like you to comment on the response Russia is planning to take in connection with the seizure of its central bank reserves. Clearly, the discussions are ongoing, but could perhaps the potential retaliation be the seizure of funds from non-resident individuals, since Russia does not hold sovereign assets? If this were an option, how would it correlate with the ongoing asset exchange if funds in type C accounts were seized?

My second question is about the President's visit to China. You have mentioned payment issues twice today. Do you expect a decision to be made as a result of the visit? Are you yourself planning to go to China this May?


As regards response measures, there have been announcements about their formulation, at different levels. Considering that such measures are outside of the competence of the central bank, I cannot comment on them.

As for international payments, we do in general see an increased risk of secondary sanctions alongside the rising complexity of payments. We are working with our partners to find ways of making payments easier since trade with friendly countries is expanding. There should be a reliable system of payments to support this expansion.

I would rather leave the countries unspecified.

QUESTION from Izvestia:

Last year, Mr Zabotkin repeatedly said that the Bank of Russia could begin to publish a forecast for the ruble in the first half of this year. It looks like this is the final policy meeting for this half of the year. Have you decided not to publish the forecast? If so, why? Are you still thinking about it?

My second question is about the updated 1,000 ruble note. It was due this year but has yet to be released.

And a further question is about the Family Mortgage programme. As regards discussions about the Family Mortgage rate for families with children aged over six, one option is 12%, according to our sources. Is the Bank of Russia taking part in this discussion, and what are your proposals? Do they include a floating rate option given the high key rate and the programme’s expected extension through 2030?


As for the publication of the rate forecast, we really thought it was possible, going by the results of the Monetary Policy Review. There are pros and cons. The pros are that market participants and analysts would understand more of what our assumptions are. The key downside is that it might be perceived as a kind of commitment and a tool to administer the exchange rate. This is why we are still analysing the pros and cons. The decision has not been made, and the matter is still under study.

As for the finalised design of the note, it is in the works, and expert discussions are ongoing.

As regards the future of subsidised mortgages, we are involved in the discussion, but the criteria for the subsidised mortgage programme are up to the Government. Our role in the discussions is to assess the overall dynamics regarding the decisions being made. Subsidised mortgage loans make up a special mortgage segment which is not sensitive to our key rate, and we need to understand that. We assume that non-targeted subsidised mortgages will end by 1 July, but we are in favour of the targeted programmes remaining in place.

QUESTION from Nizhegorodskiye Novosti (newspaper):

Let us revisit the issue of wages. People are not willing to work for low wages. What are the inflation implications of this factor? Will there be enough money in the economy to meet this demand for high wages?


Indeed, we see that the high growth in nominal salaries is ongoing and has continued since the beginning of 2023. This is due to labour shortages, an increase in the demand for labour and a lower supply. To address this shortage of labour, companies are forced to raise wages to attract the new staff needed to expand production, or simply to retain their employees so that other enterprises do not lure them away. In the long term, wage growth must match the growth of labour productivity to have zero impact on inflation. If labour productivity fails to keep pace with wage growth, companies pass their mounting labour costs on to prices. This potential pass-through of costs to prices is very significant.

Although there is enough money for wages, inflation will rise anyway, since this money is not enough to buy goods and services at the old prices. Prices will ultimately rise. Our policy is precisely aimed at limiting the excessive expansion of demand by incentivising savings, creating incentives to increase the saving rate. When the growth of labour productivity is level with the growth of wages, inflation will slow down, and the rates will decline. This is the primary goal of our policy.

QUESTION from InvestFuture Project:

My first question is about the US confiscation of Russian assets. How does the Bank of Russia assess the impact of this move on financial stability of Russia? Does it mean that Russia's liabilities have become less backed by real assets? Similarly, what does the regulator think about the possible seizure of Russian assets by the EU?

My second question is about the strengthening of the dollar: since the beginning of this year, the dollar index has risen strongly. How does the central bank assess the impact of this factor on the ruble exchange rate and domestic inflation? Is there a scenario or plan of action in the event of the continued strengthening of the currency?


As for the possible seizure of our reserves, it would have zero impact on financial stability, since operations involving the frozen assets have long been on hold, and we cannot use the assets. We been making efforts for many years to diversify our foreign currency reserves, so the reserves that are available and unaffected by the sanctions are sufficient to absorb risks to financial stability should they arise. There are no such risks at this moment.

Now on to the strengthening of the dollar index. Certainly, trends in the ratio of the dollar to global currencies affect the ruble/dollar pair, but it would be more appropriate to assess the exchange rate of the national currency not on the basis of the ruble/dollar pair but in relation to all the currencies that are crucial to foreign trade. We now see the yuan’s rising importance to foreign trade, while the dollar has lost significance.

The index of the dollar to major currencies has risen significantly since early this year, by about 4%. At the same time, the dollar gained a mere 1.6% against the ruble, that is, less than against other currencies. What does this indicate? It means that the ruble has strengthened against the other currencies, such as the euro and the yuan.

At the same time, we have a floating exchange rate. We do not have quantitative target levels for the rate, especially for individual pairs, so there is no need to take any additional measures in this regard.

QUESTION from Argumenty i Fakty:

Please tell us whether the central bank supports the goal of the Ministry of Finance to reduce the share of preferential mortgages to 25% of total mortgages? What might the timeframe be for this goal? What impact will it have on changes in the key rate?

Also, please let us revisit the question of the acceleration of lending in March notwithstanding the high rate. What do you think was behind that behaviour? Is it not risky to take loans at high rates? What happens if one's expectations of a pay rise do not come through?


As concerns why lending accelerated in March despite the high rate, the main reason is the growth of household incomes against the background of acute labour shortages and expectations for high incomes. You are absolutely right. The growth of income was so strong that it allowed more saving (evidenced by expanding deposits) as well as more consumption. This is what our monetary policy is about: ensuring that the refocus towards savings becomes entrenched along with more motivation to save.

If we look at the relationship between lending and savings, we will see that each ruble of newly issued consumer loans in March came with 3 rubles of new household deposits. The annual growth of ruble deposits, except for escrow accounts, is also solid, at almost 30%. Still, we are closely monitoring the trends in savings and lending, recognising the crucial role of growing incomes.

The second question was about subsidised mortgages. Our goal is to make commercial mortgages widely available. To this end, the share of subsidised mortgages should be significantly lower. For a group of mortgage borrowers to enjoy preferential rates, all others have to bear the cost of higher rates. This is why we think that the preferential mortgage programme must only be targeted.

We do not have a specific quantitative target for subsidised mortgages. It is simply that the large volume of such mortgages makes us keep the rates for everyone else higher. However, we still believe that when government-backed mortgages become truly targeted — which is now being discussed alongside their specific parameters — the share of subsidised mortgages will fall from 75% in March to 20–30%. Therefore, our estimates are consistent with those of the Ministry of Finance.

Importantly, the key rate move was premised on the assumption that the preferential programme would expire as planned. Without the assumption that the current scale of the non-targeted subsidised mortgage programme will be rolled back, our monetary stance would probably have to be tougher.

QUESTION from BelPressa (online portal):

I also have a question about lending. Consumer loans are growing faster than the Bank of Russia's forecast and faster than real disposable incomes. First, why did that growth exceed the forecast? Does the Bank of Russia expect this to be a long-term trend? You have unveiled a move to increase the macroprudential add-ons. Is it possible that the Bank of Russia will resort to tougher tools in order to somehow correct this trend if it increases over time?


You are right in saying that consumer lending is growing at a faster rate than we predicted in February. I would like to stress once again that macroprudential measures — the tightening of the requirements — do not affect the overall rate of lending growth. What is most likely to happen (and we have seen this in previous episodes) is the redistribution of types of loans, with banks either beginning to lend more to less risky individual borrowers or to corporate borrowers.

Our concern here is the rising debt load. Most of the acceleration in consumer lending occurred in March. One month is not enough to judge how persistent it is. Answering your question about the reasons, it is mainly driven by the growth of wages —12.8% in 2023. This growth of income is continuing, and this is more than just wage growth, since nominal incomes are up. People are willing to take on more loans, and banks are more willing to lend in the context of rising household incomes.

There is an important point here, however, which is that consumer lending is very different across segments. For example, debt on cash loans is declining. The decline was 1.4% in Q1. By contrast, credit card lending is expanding. This is caused by the macroprudential limits and their lags, among other factors. The macroprudential limits are due to be reviewed in May.

What is our concern? The quality of credit card debt servicing remains appropriate, though historically its quality has been worse than that of cash loans. That is, cash loans are serviced better, but we can see that the share of poorly serviced loans is growing.


As concerns credit cards, a certain role is played by the grace period effect. Given the current rates, it is understandable that consumers find it more lucrative to put their current income in recurring deposits at high interest rates. They manage to pay for their current expenses using credit cards within the grace periods, which is relatively cheap. Admittedly, it is not a source of continuous growth in consumer lending, but it has probably also played a role in the context of higher interest rates, and this should be taken into account.

QUESTION from Gazeta.ru

Banks have recently voiced their discontent with marketplaces. They are wondering why there is no regulation of marketplaces, especially in the area of payments. Does the Bank of Russia have any plans to somehow monitor payments made through marketplaces’ own platforms?


Marketplaces differ. Certain marketplaces have wholly owned banks, and these banks service payments and operate in line with general banking rules. They are covered by regulation and supervision. There are issues, certaintly, and we are currently exploring the need for additional regulation.


You have announced today that the add-ons for car loans will be up from 1 July. In your comments on the decision, you said that car loans have been growing very rapidly on the back of the rising share of high-risk loans. At the same time, the statistics of expanding car loans have been in evidence since last spring. But the measures take effect from 1 July, that is, they have only been announced today. Why is that? What is behind the delay? Is it possible that not only add-ons but also macroprudential limits will be applied to this category of loans moving forward?


Let me repeat my point. We do not seek to use macroprudential add-ons and limits to influence the growth of lending. We resort to them if we see that debt overloads are growing and standards are deteriorating. Indeed, car loans have expanded rapidly since last spring, but this trend is a recovery after a drop in demand. At this moment, our focus is the share of high-risk loans.

As for limits, they are a potential option, and we will discuss it with the intention of making a decision in May.

QUESTION from Bloomberg:

You have previously mentioned your intention to file lawsuits against the countries that have seized Russian assets. The US has passed a bill authorising the confiscation of Russian assets and the transfer of frozen assets to Ukraine. Under this law, the Russian owners of frozen assets, such as the Bank of Russia, the Ministry of Finance, and the National Wealth Fund, are denied the right to go to court. What is your strategy now? Will you seek the return of the Russian assets?


We will protect our legitimate interests. We believe these interests are legitimate. It is only natural that the strategy accounts for the emergence of any new laws in other countries, but we are not disclosing either our strategy or tactics.


Yesterday, we all read that the central bank had confronted the Dzhanibekov effect, so in this connection, I would like to ask you whether the cooling of the economy the regulator had expected did not materialise. When does the central bank think a significant cooling of the economy is coming, as well as a meaningful slowdown in inflation?


Let me begin with the second half of the question, which directly follows from our forecast. The forecast of 4.3–4.8% annual inflation assumes that current growth rates, that is, annualised seasonally adjusted month-on-month growth rates, will total 4% or lower in Q4. When this happens, we will be able to say that the economy has restored the balance of demand and potential supply and that economic development is set on a path of sustainable and balanced growth.

Regarding the Dzhanibekov effect, which came into focus, let me say that it is not a rare phenomenon which occurs only in zero gravity. It is in fact a classical theorem in solid-state physics, known since the 19th century, and it is in evidence here. The allegory is indeed very good.

What is the theory of rotation around the intermediate axis about? In three-dimensional space, a body has three axes of rotation: rotation around two of them is stable, while rotation around the third, intermediate, axis is unstable. Imagine a book is thrown in several directions. If it is thrown lengthwise, it will somersault and will not spin steadily. This is a precise example of the unstable intermediate axis.

In this sense, it is a very good allegory for describing the case the Governor presented in her opening statement: there is a basic scenario and there is an alternative scenario. Under the latter, if the monetary stance is not tight enough to put inflation back on the steady 4% path, other instruments of the monetary policy toolkit will be required. The next few months will probably show if we are on the way to stable equilibrium or if additional decisions are needed, so the allegory is very appropriate.


To conclude, we expect the slowdown of inflation to continue along with the switch to more balanced rates of economic growth. Monetary policy decisions will take into account the speed of a steady slowdown in inflation and the transition to such balanced growth rates.

QUESTION from Moskovsky Komsomolets:

Human rights activists have recently complained about banks increasingly engaging in misselling. Going by today’s press release, the Bank of Russia states that complaints of misselling fell 70% in Q1. At the same time, in your speech at the Duma, you mentioned that the regulator stands for increased fines of up to 1% of capital on banks for unfair profits or misleading sales. Are there any detailed statistics, and could you provide an example a bank fined under this article? According to human rights activists and my own poll of the human rights activists I know, which I conducted after the release of your press release, the 70% drop has not been felt. There is just one response outstanding, from the All-Russia People’s Front. How are banks fined for misselling practices? How many cheated consumers would draw your attention to this problem? Human rights activists say that even banks which date back to Soviet times, that is major banks which are trusted by educated and experienced people, are engaged in misselling.


Unfortunately, misselling is still a problem. For all the decline in complaints about misselling, the shameful practice is unfortunately still in evidence in the financial sector. We are discussing the problem with banks, but discussions are not enough. We have the additional authority to ban the sale of tied products consumers are given scarce information about and to demand buybacks. We are doing checks. But I agree that this is really not enough.

The current fines are small. That is, a large bank may make a million violations and pay a fine of one million rubles, but this is not much given the profits, so the fines should be increased. For this to happen, we need a law.

Ultimately, the current fines cannot be expected to make much difference. A law is needed to institute higher fines. When we took this issue to the Duma, the deputies of almost all factions supported the need for higher fines. We agree that the fines could be up to 1% of capital. Such fines are already applied to banks engaged in money laundering. We see that heavy fines, and the very risk of such fines, are an effective remedy. They are needed to protect consumers, considering that the practice is still taking place.

QUESTION from RTS TV, Abakan:

Let us revisit the issue of subsidised mortgages. The Bank of Russia has repeatedly spoken against the expansive extension of subsidised mortgages. In 2017, commercial mortgages with rates of 8–9% were available. Is there a chance of returning to the time when mortgages were widely available without the preferential programmes? When, in the regular’s view, could this happen? Can we count on a drop in housing prices?


That is a very good question. You correctly mention that a few years back, people could take out mortgages at 8–9% without large-scale preferential programmes which are funded by costly — truly costly — budget subsidies. When was that? It was possible after we had reduced inflation to 4% in 2017, and it held at about that mark for several years. That gave a powerful boost to mortgages, since banks were confident that inflation was under control, and they were able to offer long-term commercial loans at low rates.

You may well remember that before 2017, when inflation was high, the rates on commercial mortgages were in the double digits. By early 2020, when inflation had been brought under control, mortgage rates sat at about 8% on truly market loans. Over those years, market mortgages had grown at the high rate of 20%. Mortgages were increasingly more accessible to a wide range of people.

That period was unfortunately interrupted by the pandemic and then by the events of 2022, resulting in fluctuations in the market rates and in the growth of recent years. This is another reason it is necessary to return to a sustainably low inflation setting where long-term loan rates are lower and mortgages are widely accessible.

QUESTION from Vedomosti:

In its fresh outlook, the Ministry of Economy has provided a significantly different estimate for the exchange rate of the ruble and predicted its weakening. Which factors are now affecting the national currency? Does the central bank still believe that the mandatory sale of foreign currency earnings does not need to be extended?

And a second question: what is the status of discussions among BRICS countries over the mutual recognition of ratings? What are the challenges for the central bank in this process? Which BRICS countries support this concept?


As for the drivers of the exchange rate, in our opinion, they include the trade balance, imports and exports, and the impact of the key rate rise. The impact of imports and exports is marked by a lag. I have already explained our understanding of these lags and why month-on-month comparisons are inappropriate.

With regard to the mandatory sale of foreign exchange earnings, we believe that this measure is secondary in importance to the market. It rather has a psychological importance for market participants who do not analyse the trade balance. But the key drivers are fundamental factors. If we look at how companies sold their earnings before and after the mandatory sale, we will see that the proportion is largely unchanged. Between January and February, they sold 90–91% of their earnings, or slightly more. Once the one-off factors are stripped out (such as dividend payments and conversion), it approaches the 78% it was in 2022–2023.

Therefore, we expect that if the mandatory sale of foreign currency revenues is extended, the rigidity of the requirements will gradually weaken, and it will become evident that market factors are in play.

This brings further administrative problems for businesses on top of the payment problem. Every conversion and payment transaction made either direction involves additional sanctions risks and restrictions.

As regards the mutual recognition of the ratings of national agencies, the project is underway and involves many friendly countries, including the BRICS group. I will not comment on each country's decision before it is made, or on each country’s approach. We have mutual recognition with Kazakhstan, which we consider a very positive development.


Speaking of the exchange rate, to expand on the Governor’s comment on the change in the exchange rate since the beginning of the year, let me highlight the fact that since the past Board meeting (22 March), the ruble has gained against all currencies including the dollar, despite the dollar having strengthened against other currencies.

QUESTION from RIA Novosti:

Can you let us know when the second wave of the digital ruble pilot is due? Can you tell us about the increased number of participants and whether new cities are to be added, and how many?

Just recently, the Bank of Russia has called on the market and authorities to strengthen cooperation in combating fraud and to create a single digital platform for these purposes. Please tell us whether such works are underway. When could such a platform be launched, and how will it work given that FinCERT is now fully operational? That is, will it strengthen or perhaps replace FinCERT in the future?

And I have another question, which is about the pilot for the video identification of bank clients, a project the Bank of Russia has announced. Is the pilot project due to start this year? Could you tell us the timing? How many banks are going to participate?


As for the digital ruble, the first stage of the pilot test was successful. We are preparing for an extended second stage of the pilot test, and discussions with the relevant departments are ongoing.

This pilot stage will involve as many as 20 banks. Now, it is up to banks to decide which customers will participate and from which cities. That is, we do not select the cities. Incidentally, I took the same question from regional banks. We are willing to work with regional banks and bring them into this pilot, since they mostly have regional client bases. Please contact our National Payment System Department.

As for the unified antifraud platform, FinCERT is indeed our main tool. At FinCERT, we need to work to make the exchange of information with banks more rapid and, most important, to ensure that we rely on high-quality information, and this is what is discussed in detail with banks.

We are also making efforts to establish information exchange with the Ministry of Internal Affairs In our opinion, we also need to have information exchange with communication operators. Jointly with the Ministry of Digital Development, we need to decide on the better option: whether we build a unified platform or rely on the interaction of several platforms. As well as involving the financial sector, this information exchange covers other sectors.

The third question is about video identification. I believe it is a very promising trend. We are making efforts to advance all digital and remote technologies, and video identification is used in many countries. There are however concerns around both information security and the risks of fraud. We first need to develop the technology in test mode. Discussions with colleagues are in progress. The regulatory framework needs to be changed to enable test operation. Video identification, including in test operation, can be relevant for cross-border payments. The technology has high potential, and we should certainly put it in motion.

QUESTION from Frank Media:

Is there a timeframe for the Bank of Russia to appoint the CEO of National Payment Card System (NSPK)?

A second question. Are there plans to launch any rupee-denominated instruments to balance the money market?

And a small question about macroprudential policies to finish with the subject. Car loans have so far been unaffected by the tightening, while the macroprudential add-ons have covered all other types of loans, in one form or another. This type of lending is special in that a collapse is expected even without the tightened add-ons. Is there ultimately any fear that this sector is at risk of ‘overcooling’?


Macroprudential measures are not about the impact on the growth rates of loans in a particular sector. This impact is intended to ensure that loans do not expand on the back of a risky deterioration in lending standards and the risk of debt overhang.

This is how we approach car loans. The expansion of car loans to a degree in which debt-laden consumers take on more loans would also be a social problem.

As for the CEO of NSPK, we have no deadlines, and NSPK has an acting CEO. NSPK's business is stable and developing, and all its projects are going according to plan. We are now discussing the candidates. The decision will be announced once it has been made.

As concerns rupee instruments, we are being asked to launch, for example, trades in the rupee/ruble pair or to issue refinancing instruments in rupees. However, this cannot be done due to Indian legislation, that is, due to restrictions on capital transactions. The rupee is not a convertible currency, and there are capital controls, so such instruments cannot circulate in our domestic market. Nevertheless, we are seeing advances in certain hedging instruments. We see that some participants continue to use rupees for settlements,

but we cannot create the kinds of instruments we have jointly with other countries. This is why we share unique instruments with each country, which is accounted for by the relevant national regulation

Thank you for your attention.

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