Russian Central Bank chose between lowering key rate by 50, 100, or 150 bps - Nabiullina
MOSCOW. July 22 (Interfax) - The Russian Central Bank's board of directors chose between lowering the key rate to 8%, 8.5%, or 9% at its meeting on Friday, Central Bank Governor Elvira Nabiullina said at a press conference following the meeting.
"We substantively discussed three options - 8%, 8.5%, and 9%," Nabiullina said.
"There is still the potential to further lower the rate in the medium term, and we showed this in our forecast for the average key rate. If you look at the trajectory, it's gradually falling," she said.
"Everything will depend on the information coming in. The situation is uncertain, there are a lot of multidirectional alternating factors, and therefore, we will adjust monetary policy in order to return to 4% by 2024, but we're going to react to all incoming information, of course, to emerging trends," Nabiullina said.
Nabiullina said that the dynamics of imports are recovering and are generally in line with the expectations of the Central Bank of Russia (CBR), though there are still no clear signs of recovery in terms of investment imports.
"The dynamics of imports are in line with our expectations. The figure has begun to recover following a substantial decline," Nabiullina said.
"Consumer imports are mainly increasing owing to establishing new supply routes. There are still no clear signs of a recovery in terms of intermediate and investment imports," Nabiullina said.
Corporate lending is recovering, and ruble loans are replacing foreign currency loans, she said.
"Lending activity has recovered to a degree, though it is still restrained. Mortgages are recovering the fastest, though mainly owing to the preferential programs. Unsecured consumer lending has also begun to rise. Corporate lending is recovering, and ruble loans are replacing foreign currency loans," Nabiullina said.
CBR is seeing gains in retail lending in June after declines in April and May, Nabiullina said.
"The reduction in the retail loan portfolio observed in April-May has given way to growth," she said.
Nabiullina also said that the Central Bank and the government are discussing possibly modifying the fiscal rule.
"We're currently discussing a possible fiscal rule mechanism with the government and the Finance Ministry. We support resuming the fiscal rule, of course, it will be modified. In our view, this is an important mechanism that ensures the stability of economic parameters, fiscal parameters, and budget expenditures regardless of what happens with the oil and gas situation," Nabiullina said at a press conference following a meeting of the Central Bank's board of directors.
"I wouldn't want to comment on specific parameters before the Finance Ministry and the government officially announce them," she said.