Central Bank rate cut of 100-200 bps would not be felt by Russian economy, bigger drop needed - Gref
ST. PETERSBURG. July 2 Interfax) - A Central Bank rate cut of 100 or 200 basis points would not be felt by the Russian economy, a bigger drop would be needed, Sberbank CEO Herman Gref said.
"Obviously, it's high time for a cut but in my opinion, a reduction of 100 or 200 bps would not be felt at all. A much more serious cut is needed," he told journalists on the sidelines of the Central Bank's Financial Congress in St. Petersburg.
Gref sees no risk of the Central Bank being pressured into cutting the rate too quickly too soon.
"No, I don't see [such risks]. Knowing our Central Bank, I don't feel such danger at all," he said.
He said high rates were putting unprecedented pressure on the real sector. He estimated the real rate at 15%-16%.
"There's unprecedented pressure on the economy today. Of course, there is huge interest in the financial forum and in the Central Bank's further steps, further decisions because the economy is under a lot of pressure. There's no kind of artificial pressure [on the Central Bank]. It's a show of real concern about the situation that has emerged and I think this will in fact help the Central Bank make decisions much more carefully," Gref said.
The Central Bank surprised the market by lowering its key rate 100 bps to 20% per annum in June.
The Central Bank of Russia could at its July meeting consider lowering the key rate by more than 1 percentage point if incoming data are in favor of this, CBR Deputy Governor Alexei Zabotkin told journalists at the start of this week.
