Central Bank of Russia monitoring oil prices, fiscal rule will cushion budget in case of deterioration - Nabiullina

MOSCOW. April 8 (Interfax) - Tariff wars usually impact oil prices, and the Central Bank of Russia will monitor developments; however, the possible consequences for the Russian budget could be mitigated by the fiscal rule, Central Bank Governor Elvira Nabiullina said.

"The changes currently taking place in external conditions are significant. We are analyzing the possible transmission channels of these decisions on the Russian economy. You're right that the main channel of impact could be through a decline in oil prices. Because if such tariff wars - and we are seeing an escalation - continue, it usually leads to a drop in global trade, the global economy, and potentially in demand for our energy resources. There are risks here, but we need to watch how the situation unfolds, as it's still in its early stages," Nabiullina said during a meeting with members of the Communist Party (CPRF) faction ahead of the State Duma's review of the Central Bank's annual report.

The CBR always prepares for such risks, and in particular its main monetary policy guidelines always include a risk scenario and the corresponding actions, she said. This risk scenario includes possible trade wars and a decline in oil prices, she said.

The fiscal rule serves as a safeguard in the event of such developments, Nabiullina said. "What is the purpose of the fiscal rule, and why is it good that we haven't abandoned it, even though many believe it's unnecessary? When oil prices fall, the government always has the means to support budget expenditures despite lower revenues from oil. We'll keep watching how the situation evolves, but the fiscal rule will provide support," she said.