BRICS ministers, central bankers note heightened uncertainty in global economy - Nabiullina
MOSCOW. July 7 (Interfax) - The finance ministers and central bankers of BRICS countries are noting the heightened uncertainty in the prospects for the development of the global economy, Central Bank head Elvira Nabiullina told journalists.
"A meeting of financial ministers and central bankers from BRICS countries just ended where we discussed questions of common interest to our countries. First of all we discussed prospects for development of the world economy. These prospects are characterized by increased uncertainty and as a result, there is higher volatility in financial markets. And this tendency influences the economic dynamics of our countries, although every country has its own specific risks. But everybody confirmed that cooperation, including in the financial sphere, must be developed," she told journalists.
Mechanisms which are created in the framework of BRICS such as a joint bank and a pool of conventional foreign exchange reserves facilitate long term financial stability. "This mechanism has rather a long-term influence in general on stability as an insurance mechanism rather than directly influencing the exchange rate right now," she said.
"We discussed the different tendencies which take place in foreign markets. This is expectations for the normalization of the monetary policy in the United States. The uncertainty in the markets of when this will happen creates certain expectations and certain volatility. Certainly, one of the factors we discussed was the different directions for monetary policy in different countries, that is, it is expected that the United States will tighten monetary policy, and the EU and Japan will continue to ease monetary policy. This has multidirectional effects," the head of the Central Bank said.
"Certainly, this could influence the situation in the euro zone, and the situation in Greece," Nabiullina said.
The situation in Greece was not discussed in detail at the meeting.
"We didn't have the goal of working out some kind of united position. Of course everybody has concern for what is happening and what kind of financial effects this could have and what the consequences would be for financial markets as a whole, the consequences for countries with developing markets, which BRICS countries are," she said.
"All of these questions influence the situation in the world economy, which demonstrates positive growth rates in certain regions, but as of now positive growth rates and the entirety of growth will stay quite fragile and uneven," she said.
"I think that now various scenarios for the development of the situation in Greece are possible. It is unlikely that someone will tell you with some expectation which scenario will be implemented. And I too am not in such a position here to assess the probability and risks of this or that scenario. We are all hoping that the situation in Greece will be resolved, and that a mutually acceptable solution will be found, which will satisfy all parties and largely stabilize markets," she said, commenting on the probability of Greece's exit from the eurozone.