Latest news with #ElviraNabiullina
Russia Today
3 days ago
- Business
- Russia Today
Ex-central bank chief predicts Russia will never abandon cash
Russia is unlikely to ever give up cash, according to the former head of the country's central bank, who believes there will always be people who benefit from using it. In an interview with RTVI on Wednesday, Sergey Dubinin said that even as digital currencies develop, some market participants will always prefer cash transactions in order to avoid taxation. 'I don't think that in Russia, as in any other market economy country, all participants in transactions will prefer non-cash payments,' Dubinin said. 'There will always remain some percentage, possibly within 5-10%, who will prefer cash payments, including due to the ingrained habit of avoiding taxation.' He noted that large transactions will still be carried out using non-cash methods, adding that digital currencies are likely to be equated with electronic money, which will make them more convenient to use. Dubinin also highlighted the role of cash in providing banks with a source of funds. He explained that balances on current accounts, including credit cards, constitute 12-15% of total household deposits. These funds are available to banks at no cost, allowing them to be used for lending or investment purposes. Central Bank Governor Elvira Nabiullina said in April that non-cash payments in Russia had already reached 86% and predicted that the share of such payments could grow to 90% over the next three to five years. The Central Bank of Russia reported that cash circulation had increased by 5.1% last year, totaling ₽130.1 trillion (around $1.45 trillion). Deposits and withdrawals at banks' cash offices and ATMs amounted to ₽63.6 trillion (about $710 billion) and ₽66.5 trillion (around $740 billion), respectively. A poll conducted by the country's Public Opinion Research Center (VCIOM) last year found that more than half of Russians, especially young people and those who live in major urban areas, believe cash will no longer be used for daily transactions in 20 years. Almost 80% of respondents said plastic cards are simply easier and more convenient than cash. Only about 18% of Russians said they trust cards less than cash, citing reasons such as fear of losing them and a general distrust of banking services.
Russia Today
3 days ago
- Business
- Russia Today
Ex central bank chief predicts Russia will never abandon cash
Russia is unlikely to ever give up cash, according to the former head of the country's central bank, who believes there will always be people who benefit from using it. In an interview with RTVI on Wednesday, Sergey Dubinin said that even as digital currencies develop, some market participants will always prefer cash transactions in order to avoid taxation. 'I don't think that in Russia, as in any other market economy country, all participants in transactions will prefer non-cash payments,' Dubinin said. 'There will always remain some percentage, possibly within 5-10%, who will prefer cash payments, including due to the ingrained habit of avoiding taxation.' He noted that large transactions will still be carried out using non-cash methods, adding that digital currencies are likely to be equated with electronic money, which will make them more convenient to use. Dubinin also highlighted the role of cash in providing banks with a source of funds. He explained that balances on current accounts, including credit cards, constitute 12-15% of total household deposits. These funds are available to banks at no cost, allowing them to be used for lending or investment purposes. Central Bank Governor Elvira Nabiullina said in April that non-cash payments in Russia had already reached 86% and predicted that the share of such payments could grow to 90% over the next three to five years. The Central Bank of Russia reported that cash circulation had increased by 5.1% last year, totaling ₽130.1 trillion (around $1.45 trillion). Deposits and withdrawals at banks' cash offices and ATMs amounted to ₽63.6 trillion (about $710 billion) and ₽66.5 trillion (around $740 billion), respectively. A poll conducted by the country's Public Opinion Research Center (VCIOM) last year found that more than half of Russians, especially young people and those who live in major urban areas, believe cash will no longer be used for daily transactions in 20 years. Almost 80% of respondents said plastic cards are simply easier and more convenient than cash. Only about 18% of Russians said they trust cards less than cash, citing reasons such as fear of losing them and a general distrust of banking services.
Int'l Business Times
25-04-2025
- Business
- Int'l Business Times
Russia Holds Key Rate At Two-decade High Despite Slowdown Fears
Russia's central bank kept borrowing costs at a two-decade high of 21 percent on Friday to combat rampant inflation, despite banks and businesses warning the economy was headed for a slowdown. Prices have been rising quickly across the Russian economy for months, driven up by massive government spending on the Ukraine conflict and deep labour shortages. Eye-watering lending rates have meanwhile hit businesses hard, with some of the country's top corporate leaders putting pressure on the central bank to relax rates. In a statement announcing the rate decision, Russia's central bank acknowledged lending activity was "subdued" but that inflation, running above 10 percent, was still too high. It said it would keep monetary conditions "as tight as necessary" until inflation returned to target. Russia's target rate of inflation is four percent, but price increases are not expected to reach that level until 2026, and could average between 7-8 percent in 2025. Speaking after the rate decision, central bank governor Elvira Nabiullina said inflation would likely start slowing down in May and compared high interest rates to "medicine". It is "a very effective medicine that has been tested repeatedly in very different conditions," she told a press conference. President Vladimir Putin has acknowledged that inflation is too high and on Thursday warned Russia's 2025 economic growth would be "slightly lower". But he said this was part of a "soft landing" that Russia was actually "striving for". Economists have warned for months of a slowdown in Russia's economic activity, with falling oil prices, high interest rates and a downturn in manufacturing all contributing to headwinds. The Russian branch of Raiffeisenbank said in a March research note that confidence in the manufacturing sector had "significantly decreased over the last couple of months", and that production in the oil industry had also slowed. Russia reported strong economic growth for 2024, largely due to massive state defence spending which is set to jump by almost 30 percent again in 2025. But economists have cautioned that growth driven by the defence industry is unsustainable and does not reflect a real increase in productivity. Interest rate rises may also not be an effective tool to bring down inflation, as so much spending is being directed by the state, which is less responsive to higher borrowing costs, according to analysts.
Reuters
25-04-2025
- Business
- Reuters
Russia's Nabiullina on rates, inflation, the rouble and tariffs
MOSCOW, April 25 (Reuters) - Russian Central Bank Governor Elvira Nabiullina and her deputy Alexei Zabotkin addressed a news conference on Friday after the central bank held its key rate at 21%, as expected. Nabiullina and Zabotkin spoke in Russian. The quotes below were translated into English by Reuters. NABIULLINA ON RATE DECISION "We had a broad consensus to keep the rate on hold. We discussed, rather, the nuances of the signal." "Some time ago we identified some triggers that would allow us to raise the issue of lowering the key analyse a wide range of factors and trends, but first of all we pay attention to a truly steady decline in current inflation, a steady decline in inflation expectations." "We have also noted the slowdown in consumer activity, consumer lending, reduced tension in the labour market and the absence of pro-inflationary shocks from the budget or external conditions. In terms of these factors, we already see some evidence of momentum, but we need more confidence that all of this is sufficiently sustainable. Although, compared to the last (rate-setting) meeting, many processes probably look more steady now." NABIULLINA ON INFLATION "...We passed the peak (of inflation) in the fourth the turning point and the transition to a decline in annual inflation, in our opinion, will occur in increase in inflation is possible in July". NABIULLINA ON THE ROUBLE EXCHANGE RATE "We tend to attribute a larger part of the strengthening that has occurred since the beginning of the year to more stable factors, primarily related to the action of tight monetary part of the rouble strengthening is part of the process of disinflation, more restrained dynamics of demand, greater attractiveness of the rouble as a means of saving." "But we are still not ready to attribute all the strengthening of the rouble to the monetary policy news background related to geopolitics makes its own contribution. And in this regard it is probably premature to talk about the sustainability of the strengthening of the exchange rate. Here we need not only market expectations, but also actual shifts." *NABIULLINA ON TARIFFS "The situation is developing dynamically, and we will have to keep track of what level of import tariffs will eventually emerge. We have taken into account the factor of trade wars in our forecast - we have lowered the growth rate of the world economy, we have slightly reduced the estimate of oil prices. Because the main channel of influence of these tariff wars on the Russian economy is a decrease in prices for the main goods of our exports. The other effects, in our opinion, are more limited, given the structure of foreign trade and the fact that there are restrictions on financial flows." "The volume of Russian exports to the U.S. is insignificant and there is no need to stimulate domestic demand to replace the falling external demand in these conditions. So for us the direct impact is minimal. For us, the impact of tariffs is more indirect, primarily through weaker global demand, lower global commodity prices - and this is a pro-inflationary risk." *ZABOTKIN ON TARIFFS "Obviously, the impact of trade wars will strongly depend on the scale of protectionist measures and the fragmentation of world trade that will eventually emerge. This is a factor of considerable uncertainty relative to our baseline forecast. The current picture has not led to a significant change in the baseline forecast to date."
France 24
25-04-2025
- Business
- France 24
Russia holds key rate at two-decade high despite slowdown fears
Prices have been rising quickly across the Russian economy for months, driven up by massive government spending on the Ukraine conflict and deep labour shortages. Eye-watering lending rates have meanwhile hit businesses hard, with some of the country's top corporate leaders putting pressure on the central bank to relax rates. In a statement announcing the rate decision, Russia's central bank acknowledged lending activity was "subdued" but that inflation, running above 10 percent, was still too high. Russia's target rate of inflation is four percent, but price increases are not expected to reach that level until 2026, and could average between 7-8 percent in 2025. "The Bank of Russia will maintain monetary conditions as tight as necessary to return inflation to the target in 2026," the bank said. In a video call with bank governor Elvira Nabiullina and cabinet officials on Thursday, President Vladimir Putin acknowledged that inflation was too high and that Russia's 2025 economic growth would be "slightly lower". But he said this was part of a "soft landing" that Russia was actually "striving for". Economists have warned for months of a slowdown in Russia's economic activity, with falling oil prices, high interest rates and a downturn in manufacturing all contributing to headwinds. Russian lender Raiffeisenbank said in a research note in March that confidence in the manufacturing sector had "significantly decreased over the last couple of months", and that production in the oil industry had also slowed. Russia reported strong economic growth for 2024, largely due to massive state defence spending which is set to jump by almost 30 percent again in 2025. But economists have cautioned that growth driven by the defence industry is unsustainable and does not reflect a real increase in productivity. Interest rate rises may also not be an effective tool to bring down inflation, as so much spending is being directed by the state, which is less responsive to higher borrowing costs, according to analysts.
