Russia’s economy cannot survive indefinitely with its financial reserves and will have to transform in order to cope with the impact of international sanctions. This was announced by the governor of the Russian Central Bank Elvira Nabiulina, quoted by BTA.
It will take time until 2024 for inflation to return to the 4 percent target, Nabiulina predicts.
“There is a final period in which the economy can work with the accumulated reserves. In the second and third quarters of the year we will enter a period of structural transformation and search for new business models,” Nabiulina said. financial market, “but will begin to affect the economy more and more.”
“The main problems will be related to restrictions on imports and foreign trade logistics, and in the future to restrictions on exports,” Nabiulina warned, adding that Russian companies will have to adapt.
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“Manufacturers will have to look for new partners, logistics or switch to obsolete products,” Nabiulina said, adding that exporters will have to look for new partners and logistics agreements and “all this will take time.”
In Moscow alone, at least 200,000 jobs are at risk due to the withdrawal or closure of foreign companies following Russia’s invasion of Ukraine, Russian Mayor Sergei Sobyanin said.
He said a plan worth 3.6 billion rubles (about 38m euros at current exchange rates) was adopted last week to help Muscovites at risk of losing their jobs.
“The program mainly concerns employees of foreign companies who have temporarily suspended their activities in Russia or decided to leave the country. According to our estimates, there is a danger of about 200,000 people losing their jobs.”
The mayor’s office will offer “temporary employment” to employees of foreign companies declared technically unemployed, which will allow them to receive additional income from work in the “archive management or repair of equipment” in the municipality. Subsidies are also provided to support vocational retraining.
According to the mayor, financial aid for households is granted by presidential decree. Measures are also envisaged to facilitate loans to small and medium-sized enterprises.
Russia’s central banker has outlined several measures to help the economy adapt. Consideration is being made to make the sale of foreign exchange earnings by exporters more flexible. The issuance of digital rubles is also being tested to enable Russians to make transfers between digital wallets. The pilot operations are planned for the second half of the year, Nabiulina explained.
Russia’s central bank has more than doubled its key interest rate to 20 percent after international sanctions were imposed on the country over the invasion of Ukraine, but then reduced it to 17 percent, signaling a challenging economic environment and slowing inflation.
Today the ruble is trading around 80.05 USD / RUB against the US dollar. By the end of April, the ruble could receive support from tax revenues, as companies have to pay a record 3 trillion rubles ($ 37.50 billion) in taxes.
At the same time, Russian stock indices are falling. The dollar-denominated RTS index fell 1.35% to 942.56 points. The Moscow stock index MOEX, denominated in rubles, lost 2.52% to 2,364 points.
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