6 Jul 2023 12:21

CBR prepared for currency intervention if financial stability threatened, but this not the case now - Nabiullina

ST. PETERSBURG. July 6 (Interfax) - The Central Bank of Russia (CBR) might carry out currency interventions only if there are risks to financial stability, but there are no such risks at the moment, Central Bank chief Elvira Nabiullina said.

"We don't target the ruble's exchange rate. For us, any rate is acceptable, we take it into account when we make decisions on monetary policy. We're prepared to meddle in the forex market with our interventions only when we see some risks for financial stability. But what do risks to financial stability mean, we're sometimes asked. When there is not enough liquidity on the market, then we might intervene. Right now there are no such risks to financial stability," Nabiullina said at the CBR's Financial Congress.

The exchange rate is formed primarily under the influence of the trade balance, she said.

"I've already talked about the current account. Well look, for example, if you compare January-May of this year with January-May of last year, exports fell by approximately 40%, according to preliminary data, while imports rose by around 15%. There are economically objective factors, the exchange rate is formed under their influence," Nabiullina said.

The CBR factors this into monetary policy in order to "ensure inflation at our target," she said. "And the strength of the ruble is, foremost, the purchasing power of the ruble. This is determined by the level of inflation," Nabiullina said.