The First Deputy Chairman of the Central Bank of Russia, Sergey Shvetsov, said today that the next few days for Russia will be comparable to the most difficult period of the 2008 financial crisis, the Central Bank assesses the situation as critical. The announcement was made at a "round table" on the financial markets in Moscow.
"About what is happening, we couldn’t even think of it in a nightmare a year ago. But unfortunately we can't always foresee even the near-term prospects of our financial market. Many of the participants are in a complicated condition due to these events. Believe me, the choice that the Board of Directors of the Central Bank made is a choice between the very bad and the very very bad. What is happening today and in the last few days may have various consequences," Shvetsov warned.
He also said that the Central Bank will not be limited in their actions by only increasing the key rate – there other actions will follow in the field of monetary policy. "A thorough analysis was made of what possible actions the Central Bank has, and the decision that was made public was chosen. Naturally, this is not a decision that completes the actions of the Central Bank. I think this will be followed by disclosure of other measures aimed at stabilizing the situation and finding a way out of the situation in which we are now," TASS cites Shvetsov.
Associate Professor of the finance, monetary circulation and credit department of RANEPA, Maxim Safonov, shared his opinion in a conversation with a reporter of "Vestnik Kavkaza" that at the moment Russia is facing not so much an objective, but a subjective crisis. "If we talk about the different kinds of speculation, currency, stock, it cannot be called a crisis – there is a crisis in the understanding of what we should do now, that it is in our minds. Of course, the objective and subjective are interrelated, since a significant proportion of the budget consists of revenue from abroad, i.e. foreign currency earnings and reducing its volume we are starting to have trouble filling the budget. But I wouldn't say that now it is as critical as in the darkest days of 2008," he said.
Safonov suggested not getting carried away by comparing the former and present times. "Comparing is futile and useless, as the most difficult days of 1998, 2008 and 2014 all had different reasons and content. The decisions that the Central Bank makes now are the expression of a certain official position that does not mean that it is optimal or rational. The actions of the Central Bank connected with stabilization are clear to me, just as it is clear that those actions provoke different reactions from the market participants than were expected," the expert said.
Chief economist at AFK "Sistema" Evgeny Nadorshin, on the contrary, said that the crisis in Russia can already be spoken about aloud. "What we can see now has been gaining momentum for a long time, we have a natural result of the processes occurring inside and outside the Russian economy. The events of the end of 2008 were rather shocking, to a large extent provoked by external factors, and events in our foreign exchange market and beyond it developed in parallel, but the nature of the current situation is somewhat different: at first there was the process of accumulating negativity within the economy, then the external factors have accelerated the development of these "savings", which are not breaking out with such panic attacks for the first time," he pointed out.
Nadorshin emphasized that in summary the situation is significantly different from the situation in 2008. "Back then, despite some minor flaws in the domestic economy, the crisis itself, the problems themselves, were brought from the outside. What we face now is primarily our own crisis. Comparing the two crises is possible, but their causes and conditions are different, and in my opinion the current situation is substantially worse than in 2008, there is every reason to get prepared for the fact that there won’t be a rapid recovery after the crisis. We can’t expect any help from aside. For now we have financial markets overreacting, but in January there will be statistics on the dynamics of the development of economic sectors, and we are likely to see continuous and very large-scale deterioration of a large number of indicators," the expert warned, adding that there are no visible resources on the basis of which one could expect good news about Russia's economy.
