Bank of Russia keeping close eye on prevention of excessive cooling of economy
The regulator said earlier following its board meeting that the cooling of credit activity has already encompassed all segments of the credit market.
The Bank of Russia keeps a close eye on making sure that extreme scenarios in the economy are prevented, the regulator’s chief Elvira Nabiullina said, adding that it is necessary to mitigate overheating and avoid excessive cooling.
"Our politics is aimed at prevention of extreme scenarios, which means that we cannot let the economy overheat further on. It is necessary to make sure that overheat-ing subsides. That said, it is necessary to avoid excessive cooling, which is why we keep a close eye on this," she told a press conference after the meeting of the Central Bank’s board of directors.
The regulator has intensified exchange of information with the government, business and banks to understand how the participants of the financial market respond to the combination of factors, Nabiullina added.
The time of the maximum influence of measures taken earlier on monetary conditions is coming now, she said, adding that effects of both the tightening of monetary policy and the planned removal of easing of requirements work.
The regulator said earlier following its board meeting that the cooling of credit activity has already encompassed all segments of the credit market. In November, growth in retail lending nearly stopped. For the first time since the beginning of 2024, corporate lending growth decelerated significantly. The current intentions of banks to expand lending, taking into consideration, among other things, the current demand from borrowers, create the conditions for a notable cooling of lending activity in 2025, the regulator said.
Earlier on Friday the Bank of Russia made an unexpected decision to keep the key rate at 21% per annum.
Source
The Bank of Russia keeps a close eye on making sure that extreme scenarios in the economy are prevented, the regulator’s chief Elvira Nabiullina said, adding that it is necessary to mitigate overheating and avoid excessive cooling.
"Our politics is aimed at prevention of extreme scenarios, which means that we cannot let the economy overheat further on. It is necessary to make sure that overheat-ing subsides. That said, it is necessary to avoid excessive cooling, which is why we keep a close eye on this," she told a press conference after the meeting of the Central Bank’s board of directors.
The regulator has intensified exchange of information with the government, business and banks to understand how the participants of the financial market respond to the combination of factors, Nabiullina added.
The time of the maximum influence of measures taken earlier on monetary conditions is coming now, she said, adding that effects of both the tightening of monetary policy and the planned removal of easing of requirements work.
The regulator said earlier following its board meeting that the cooling of credit activity has already encompassed all segments of the credit market. In November, growth in retail lending nearly stopped. For the first time since the beginning of 2024, corporate lending growth decelerated significantly. The current intentions of banks to expand lending, taking into consideration, among other things, the current demand from borrowers, create the conditions for a notable cooling of lending activity in 2025, the regulator said.
Earlier on Friday the Bank of Russia made an unexpected decision to keep the key rate at 21% per annum.
Source