Key remarks from Russian c.bank governor after interest rate hike

MOSCOW, Feb 28 (Reuters) – Russian Central Bank Governor Elvira Nabiullina spoke at an online news conference after the central bank raised its benchmark rate to 20% in a move emergency Monday. Read more

Nabiullina spoke in Russian. The quotes below have been translated into English by Reuters.

KEY RATES AND SANCTIONS

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The central bank today raised its benchmark rate to 20% as new sanctions triggered a significant deviation in the ruble rate and limited the central bank’s options to use its gold and foreign currency reserves…

We had to raise rates that would compensate citizens for increased inflationary risks.

We will take further monetary policy decisions based on actual developments and our assessment of risks, primarily based on external conditions. Monetary policy will aim to maintain financial and price stability.

INTERVENTIONS

On Thursday and Friday, the Bank of Russia carried out foreign exchange interventions – 1 billion dollars (Thursday) and a lesser amount on Friday. Given the restrictions on the use of gold and foreign exchange reserves in dollars and euros, we have not made any interventions today.

MANDATORY ORDER FOR EXPORTERS TO SELL 80% OF THEIR EXPORT REVENUES

This measure was taken to allow a smooth foreign exchange supply in the national foreign exchange market to meet the demand of importers and citizens. At the same time, we are implementing a number of measures to curb capital outflows from non-residents.

QUICK

We have developed a national financial infrastructure and it will operate without interruption. We have the national banking messaging system – SPFS – which can replace SWIFT at the national level. Foreign participants can join

BANKING SECTOR AND COMPLEMENTARY TOOLS

The central bank will be flexible to use all the necessary tools… The banking sector has moved to a structural liquidity deficit, the banks have sufficient cover to raise funds from the central bank…

We have taken a number of measures that would allow banks not to increase their provisions during the year… The measures taken are equivalent to an increase of 900 billion rubles in bank capital…

All banks fulfill and will continue to fulfill their obligations to their customers. All client funds are safeguarded, all operations are available to clients.

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Reports from the Moscow office

Our standards: The Thomson Reuters Trust Principles.

Stephen V. Lee