Affordable loans alongside increased budget expenditures provided the boost helping the Russian economy rebound already by mid-2023 — Bank of Russia Governor Elvira Nabiullina emphasised in her address to readers.
When the recovery completed, demand from the government, households and businesses continued to surge, while staff shortages were increasingly limiting the expansion of domestic production, with demand shifting to imports.
As noted by Elvira Nabiullina, the Bank of Russia was taking decisive measures in these conditions in order to protect people’s incomes from inflation and the economy — from a situation where prices and the exchange rate rather than output and real consumption become much more responsive to demand.
According to the Bank of Russia Governor, the key rate increase in 2023 H2 stopped the acceleration of inflation and became an important factor stabilising the ruble exchange rate. The accumulated effect of the key rate rise will manifest itself in full in 2024 by slowing down price growth.
Elvira Nabiullina also stressed that, even despite the monetary policy tightening, the expansion in lending had hit a record high by the end of the year. In order to prevent people’s over-indebtedness, the Bank of Russia had been consistently toughening the macroprudential regulation.
According to Elvira Nabiullina, the Bank of Russia especially focused on developing the securities market, resuming the disclosure of information by companies, and creating long-term investment instruments that would be convenient to individuals.
As noted by the Governor, the key tasks to be addressed are the unblocking of Russian investors’ assets and the development of a cross-border payment system that would be resilient to sanctions. The relevant work will continue in 2024.
‘Our policy remains unchanged in key aspects. These are the protection of people’s real incomes and the promotion of conditions ensuring well-balanced economic growth that would increase households’ well-being. These are the values that the Bank of Russia will remain committed to in the future,’ Elvira Nabiullina noted addressing the audience.
The Annual Report presents the main results of the regulator’s work and contains its financial statements and auditors’ reports. Simultaneously with its Annual Report, the regulator releases a more compact document for the general public — The Bank of Russia’s Work: Results in Brief for 2023.
