(Finance) – “Le conditions for the Russian economy have changed dramatically. The new sanctions imposed by foreign states have led to a significant increase in the ruble exchange rate and limited the opportunities for Russia to use its gold and foreign exchange reserves. “Thus began the speech with which Elvira Nabiullina, governor of the Central Bank of the Russian Federation, provided the latest updates on measures taken in response to Western sanctions. Already this morning, the country’s central bank announced the closure of the Moscow stock exchange today, bans on the sale of assets to foreigners and the increase in the reference rate from 9.5% to 20% to face the risks due to the devaluation of the ruble and high inflation.
“The dynamics of the exchange rate is a further pro-inflationary factor that affects current product prices and determines a drastic increase in devaluation expectations and inflation expectations – said Nabiullina – For support the attractiveness of deposits and protect household savings from depreciation, we must raise interest rates to levels that would offset the increased inflation risks for people. “
Interventions for banks
Regarding the liquidity of the banking sector, the Bank of Russia “continuously provides the banks with rubles cash and non-cash. Due to the high demand for liquidity, the banking sector is currently experiencing a structural liquidity deficit. The banks have sufficient guarantees to increase the amount of liquidity raised by the Bank of Russia, “said the governor.
She said she was ready “to promptly adopt all the necessary measures” to support the banks and specified that she had “already introduced a series of regulatory easing“, in addition to” further monitoring banks’ needs in mechanisms that would support their functioning under the new conditions. ” capital adequacy. This will help banks to gradually adapt to the new environment – he added – We have implemented a series of measures that allow banks to do not increase your provisions during the year“.
The foreign exchange market
Speaking of the foreign exchange market, the Bank of Russia “carried out foreign exchange interventions totaling $ 1 billion on Thursday and to a lesser extent on Friday – Nabiullina explained – Given the restrictions on the use of gold and currency reserves in dollars and euros, today we have not made any interventions. The government announced the decision requiring companies to sell 80% of their export earnings. This measure will help ensure a uniform supply of foreign currency in the domestic currency market to meet the needs of importers and households. “In addition, the central bank is taking a series of measures to limit the withdrawal of capital by non-residentswhile restrictions on the sale of securities by non-residents have already been introduced.
The alternative to SWIFT
The new wave of Western sanctions, which arrived over the weekend, resulted in the exclusion of large Russian banks from the leading global SWIFT payment system. “We have developed the national financial infrastructure – said Nabiullina in this regard – It will continue to work smoothly. That is to say, we have the financial messaging system (FMS) which can replace SWIFT within Russia and allows the connection of players. The National Payment Card System processes all payment card traffic within Russia. International payment system cards issued by sanctioned banks will continue to function normally within Russia. ”