The Deputy Governor of the Central Bank of Russia, Dmitry Tulin, said that cutting its key rate now would not lead to economic growth in the current conditions.
"We consider the impact of monetary policy on the state of the real economy. If we believed that our policy is too tight and it kills the real sector and strangling the economic growth, we would have chosen a different trajectory of the key rate. We believe that cutting the key rate would not lead to economic growth in the current conditions," the first deputy chairman of the Central Bank said.
He said that profits of enterprises in 2015 increased by 53% is comparison with 2014. However, the investments to affluent sectors of the economy declined, Tulin said.
According to him, "the main thing is not to hurry with cutting the key rate. Today, we cannot ensure the stability of the exchange rate due to the structure of our economy, its excessive dependence on raw materials exports," Interfax cited him as saying.
"To partly compensate it we can provide the stability of the interest conditions," he said. "And we were afraid that an excessive sharp decline in the rate will make us to rise it later anyway," the first deputy chairman of the Central Bank noted, adding that "it would be bad for business and the real economy sector, as well as prospects to get rid of stagnation."
According to him, the maintenance of a high level of real interest rates will not hurt the real sector of the Russian economy.
Recall, the Russian Central Bank left its benchmark interest rate unchanged at 11% for the sixth time in a row at the meeting in late April.
Associate Professor of the stock markets and financial engineering of the Department of Finance and Banking at RANHiGS, Sergey Hestanov, said in an interview with a 'Vestnik Kavkaza' correspondent that the main problem of the Russian economy was not due to the actions of the Central Bank. "The main problem is that purchasing power has decreased. In such conditions, any actions of the Central Bank to support it will lead only to increase in prices. The main problrm of the Russian economy is not the high cost of money, but the lack of effective demand,'' the expert said.
The professor of the department Finance, money circulation and credits at RANHiGS, Yuri Yudenkov, said in an interview with our correspondent that Tulin's position was not justified. "I have said it many times that the Central Bank invents different reasons in order not take any responsibility in this case. If they reduce the rate it won't change anything. So if reduce the rate it won't bring any bad things. Let them try," the expert expressed his opinion.
