29 Jun 2022 14:58

Central Bank to consider participating in ensuring liquidity of non-reserve currency markets, but only at launch stage

MOSCOW. June 29 (Interfax) - The Central Bank of Russia (CBR) is ready to consider participating in ensuring the liquidity of non-reserve currency markets, though only at the launch, Central Bank Governor Elvira Nabiullina said during the congress of the Russian Union of Industrialists and Entrepreneurs (RSPP).

"There are problems regarding the point of view of international settlements. We see it as incentivizing the transition to settlements in national currencies. The work has happened before, though it has been rather sluggishly, because this has not been a matter of the banking system, rather, though, of the contracts themselves. We currently see that, for example, many exporters are ready to switch to other national currencies, but not all importers," Nabiullina said.

"We see mismatches in the transition to national currencies. For example, when one receives export earnings, and must sell on the market if there is no demand from importers; as they prefer dollars and euros, accordingly; this is unprofitable for exporters. Therefore, it should be the work of business to transfer most contracts to this level," Nabiullina added.

Nabiullina indicated that the enterprises do seek to accumulate revenue in national currencies, especially preferring dollars and euros.

"It has been assumed that the Central Bank would perform this task, though then one must understand that this could mean an additional increase in inflation. We would have to print money against depreciating currencies, and these are higher rates. We are prepared to consider certain procedures in order to participate in launching and ensuring liquidity in these markets, though it should be gradually, in our opinion, on market conditions," Nabiullina said.