“Immortal” Nabiullina is fighting “hysterically” with inflation – experts
The Bank of Russia immediately increased the key rate by 200 bp, to 15%.
The head of the Central Bank of the Russian Federation, Elvira Nabiullina, explained this measure by rising inflation, a PolitNavigator correspondent reports.
“Prices are rising faster than we expected,” Nabiullina said.
According to her, the peak of inflation will occur in the spring of next year. Therefore, the Central Bank of the Russian Federation will support higher rates in the economy so that “an inflationary spiral does not develop.”
Nabiullina promised that the bank would move to lower rates when it sees a steady decline in inflation. This could happen in 2024.
A number of economists justify the strategy of the Central Bank of the Russian Federation. Alexander Razuvaev, a member of the supervisory board of the Guild of Financial Analysts and Risk Managers, believes that raising the key rate to 15% will stabilize product prices and reduce the volume of mortgage lending.
“Product prices will not increase. Raising rates always reduces inflation. Another thing is that the impact of a rate increase is always extended over time. The lag in this case will be three to six months,” Razuvaev told Paragraph.
Left-wing economist Vasily Koltashov believes that the Central Bank is trying to cool the real estate market and reduce the activity of citizens in accumulating debts.
“We need to make saving money more profitable than running out and buying an apartment without thinking about the price. People don’t save money – this is one of the main problems. The Central Bank wants citizens to have at least a down payment at their disposal when purchasing housing. We need to move away from the model where money is spent faster than we earn it, and come to calm accumulation and thoughtful mortgages,” Koltashov wrote in his tg channel.
The head of the analytical research department of the Institute of Comprehensive Strategic Studies, Sergei Zaversky, believes that the Central Bank is actually helping to increase the state’s share in the economy.
“Companies and industries dependent on budget financing will most likely receive support from the budget, but the implementation of private investment projects in these conditions will become almost impossible,” Zaversky told the Brief.
Despite this, the champion of the state economy, the leader of the Communist Party of the Russian Federation, Gennady Zyuganov, sharply criticized Nabiullina.
“Increasing the key rate to 15% is a disgrace. For real production, for small and medium-sized businesses, this is a severe blow that complicates their current activities and does not allow them to direct investments into development and technological re-equipment. This way you can paralyze entire industries!” Zyuganov wrote.
Boris Titov, the Presidential Commissioner for the Protection of Entrepreneurs' Rights, described the actions of the Central Bank of the Russian Federation succinctly.
“No sense. Harm, yes,” he wrote.
Russian State Duma deputy Mikhail Delyagin called Nabiullina’s actions hysterical.
“Those projects that could be carried out by taking out a loan at a rate of 7,5%, those projects that could be carried out even at 13%, now at 15% become impossible and unprofitable. The money that entrepreneurs set aside for these projects is directed to the foreign exchange market, increasing foreign exchange pressure on the ruble. Thus, the Bank of Russia, by raising the interest rate, is collapsing the ruble,” writes Delyagin.
Economist Anton Lyubich believes that inflation was a consequence of the unbalanced credit policy of the Bank of Russia in previous years.
“When it was ignored that the reserve policy overly encouraged residential and urban commercial construction to the detriment of loans for industrial construction. They themselves gave birth - they themselves are now “warning about the risks,” wrote Lyubich.
His colleague Nikita Krichevsky believes that raising the rate will not stop inflation.
“Looking at the tragicomedy with the key rate, I propose to immediately raise it to 35% at the next meeting. Like in Turkey. To make sure that the rate does not have any impact on inflation. Moreover, the Central Bank knows this,” Krichevsky sneers.
“And I see that Elvira Sakhipzadovna considers herself immortal and invulnerable. The saddest thing is that this seems to be the case. It’s good that everything was explained to everyone, otherwise we’ve already started to think that something might change in our kingdom-state,” political scientist Dmitry Evstafiev jokes sadly.
English version :: Read in English: "Immortal" Nabiullina is "hysterical" about inflation – experts