The search for new markets must begin.
Moscow. According to the central bank, the Russian economy cannot live on its financial reserves forever and needs to reposition itself in the face of international sanctions. “The period in which the economy can live on reserves is finite,” central bank chief Elvira Nabiullina said on Monday. A phase of structural change and the search for new business models will begin in the spring and summer.
So far, the sanctions have mainly had an impact on the financial market. “But now they will also increasingly affect the economy,” warned Nabiullina. The main problems will likely be import restrictions and more difficult logistics in foreign trade. Export restrictions are also likely to have a growing impact. “Russian manufacturers will have to look for new partners and logistics options or switch to producing products from previous generations,” said Nabiullina, exporters will have to look for new customers.
It’s not all right about inflation. It will take until 2024 for the inflation rate to reach the four percent target again. At 17.49%, it is currently at its highest level in over 20 years, as almost everything has become more expensive since the start of the Russian invasion of Ukraine: from sugar to vegetables, smartphones and clothes.
Flexibility for exporters
The central bank is considering easing the sale of foreign exchange by exporters, announced Nabiullina. Until now, they had to convert 80% of their foreign exchange earnings into the national currency, the ruble. The issue of digital rubles should also be tested. This should allow Russians to make transfers between digital wallets. Pilot projects are scheduled to start in the second half of the year.
In response to the sanctions, the Russian central bank more than doubled its interest rate to 20%. However, this month it dropped to 17 percent. (ag.)
(“Die Presse”, print edition, April 19, 2022)