Sberbank CEO does not expect new interest rate hike in Sept
VLADIVOSTOK. Sept 12 (Interfax) - Sberbank head Herman Gref said he does not expect the Central Bank of Russia (CBR) to raise its key interest rate further at its board meeting on September 15.
"Personally, I don't expect an increase, because it seems to me that too little time has passed since the previous increase. At this point it's difficult to assess the consequences of the regulatory measures that were introduced," Gref told reporters when asked about the upcoming rate decision.
He also said he does not expect the key rate to stay high for very long, as the CBR "has learned to work with such inflation surges."
"It's my feeling that it won't last long and it doesn't seem that there will have to be even more tightening, at any rate they won't go substantially further. I think that within three months it will be clear how the situation will develop. Six months, perhaps, such a horizon. If all their measures yield a result, and I'm sure they will yield a result, I think that we'll begin a cycle of cuts. I don't know, maybe the second quarter of next year," Gref said.
He said the "fight with inflation is always a trade-off between economic growth and impact on inflationary trends." The "whole world is experiencing inflation, everyone is facing exactly the same thing, so the measures taken by the Bank of Russia to maintain financial stability will, of course, hit economic growth," Gref said, adding that "all businesses will feel this and banks as well" and there has been a "fairly significant" drop in demand for financial resources.
"I think that the Bank of Russia will look at the results and adjust its policy depending on how the market reacts to the measures it has taken. As for us, this will certainly affect our financial result, but it won't be something substantial that would be worth discussing or that can somehow radically affect our results," Gref said.
The CBR hiked its key rate by 350 basis points to 12% at an extraordinary board meeting on August 15 in order to curb risks for price stability. After the meeting, the CBR did not give its usual signal regarding the future direction of monetary policy.
In a statement issued after the board meeting, the CBR only said that it "will make further decisions on the key rate taking into account the actual and anticipated dynamic of inflation relative to the target and the process of the economy's restructuring, as well as assessing risks from internal and external conditions and financial markets' reaction to them." It also said that with the monetary policy being pursued annual inflation is expected to return to 4% in 2024.