September 6, 2019 / 12:35 PM / 4 months ago

HIGHLIGHTS-Quotes from Russian central bank chief's news conference

(Adds quotes)

MOSCOW, Sept 6 (Reuters) - The following are highlights from Russian central bank chief Elvira Nabiullina’s news conference following the bank’s interest rate decision:


“The 4% consumer lending growth estimate (set by the Ministry of Economic Development) is unrealistic in our view. We estimate consumer lending growth at 10%.”

“(Growth rates) will decrease firstly due to the influence of our macroprudential measures, which we are implementing in such a way as to facilitate a smooth reduction in the rate of growth of consumer lending. We do not consider it possible for growth to slow to 4%.”

“Our consumer lending forecasts differ, and consequently so do our inflation estimates... In our view, these estimates (by the economy ministry) are too low.”


“There have always been differences between the central bank’s and the economy ministry’s forecasts. Despite the differences, our forecasts on GDP indicators are pretty close.”


“We are less concerned about the level of the key rate than about monetary conditions being neutral... This will require constant monitoring, in particular of whether we are reaching the 4% (inflation) goal or not... A revision (of the rate’s neutral range) is possible, but it won’t necessarily happen.”

“We have finally entered the key rate range we consider as a probable neutral interval. Given today’s decision, the key rate is at the top of this range from 6% to 7% in nominal terms, or from 2% to 3% in real terms... with inflation expected to reach 4%.”


“Exchange rate dynamics in principle affect inflation, though the transfer ratio has fallen significantly. We now estimate it to be lower even than 0.1%.”

“Of course we may see some weakening of the exchange rate in the coming months and we take this into account in our forecasts. We estimate this to be from 0.1% to 0.2% by the end of the year.”


“A lowering of the key rate is likely at one of the upcoming meetings.”

“Monetary conditions are continuing to loosen. We expect that both previous and today’s key rate decisions will underpin this trend.”

“Market expectations for interest rates shifted downwards on the back of the signals in the follow-up to the Board meetings in June and July. This was also driven by the shifting expectations for monetary policies of the U.S. Fed and the ECB as the economic growth outlook for the U.S. and euro area deteriorated.”


“Economic activity undershot the Bank of Russia’s expectations in the second and early third quarter. This results from internal and external factors. This made us revise our 2019 GDP growth forecast from 1.0-1.5% to 0.8-1.3%.”

“An important external factor is a slowdown in growth of the global economy, which has proven more tangible than expected due to, among other things, the growing contradictions in international trade.”


“In the first half of the year, growth in fixed capital investment slowed considerably, which is associated with, among other things, a rather sizeable drop in public investment.”

“Consumer demand continues to make a positive contribution to GDP growth... Consumption growth will remain slack as household incomes stagnate. This year, we expect it to come in at 1-1.5% range.”

“We may only expect GDP growth to accelerate to 2-3% by the end of 2022, rather than in 2021. A higher economic growth rate should primarily be driven by the shift to a more extensive implementation of national projects.”


“We have updated the balance of payments to factor in the world economy dynamics, prices for oil and other Russian exports. We assume a gradual decline in oil prices to $50 per barrel in 2021.”


“Households’ and businesses’ inflationary expectations remain elevated. So we continue to pay close attention to the trend.” (Compiled by Polina Ivanova; editing by Anton Kolodyazhnyy)

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