The Russian central bank warns that the economy will sink in the 22nd quarter

The Russian central bank warns that the economy will sink in the 22nd quarter

21 April 2022 | 11:34

The Russian central bank warned that the Russian economy is located in a “Difficult period”that the country’s economic reserves are running out and that the “Real crisis” will arrive in second and third quarter of this year.

During his appearance before the Duma (Russian Congress), Elvira Nabiullinathe governor of the Bank of Russia has warned that his country’s economy is facing a crisis series of structural changes from sanctions imposed by the West.

Elvira Nabiullina He explained that it will be in the next few quarters when Russia actively enters a transformation period Y search for new business models for many companies.

“The period in which the economy was able to live on reserves is over. Already in the second quarter or the beginning of the third we will enter a phase of structural transformation ”, he said before the legislators.

Although he specified that these sanctions initially impacted the financial sectorlittle by little they will begin to affect the real economy.

“The main problems will be associated not so much with sanctions on financial entities, but with import restrictions, foreign trade logistics and, in the future, possible export restrictions on Russian products,” he said.

The governor of the Russian central bank pointed out that the economic situation it is far from normalized and pointed out that the real problem is not the financial system, but rather that it lies in the shortage of supplies which factories and companies will receive in the near future.

The Russians will lose purchasing power

The Russians will have to accept the loss of purchasing power as the central bank will not try to compensate for inflation, Nabiullina assured.

“We will not try in any way to reduce it (inflation) because it would prevent companies from adapting. Restoring the supply of imported components is now more difficult and expensive and this inevitably affects the price of the final product, ”she explained.

According to international media, the inflation rate officer was prowling winds% in March, the first month after the invasion of Ukraine, this led many companies to suspend exports to Russia until the value of the ruble is clarified.

You can also read: IMF, World Bank and EBRD foresee serious consequences due to the conflict in Ukraine

Russia warns about foreign currencies

The governor of the Russian bank also warned about the exchange fund that Russia had in the face of the crisis.

According to the official, reserves were in circulation before the crisis 620 billion dollarsbut half was frozen by the West and the rest was used to protect the price of the Russian currency.

However, according to the banker, this is not enough. “It is gold and yuan, which does not allow us to manage our currency on the domestic market in an operational way,” he stressed.

Buyers of the precious metal would face sanctions and the Chinese currency is less liquid on the international market than the US or European currency due to Beijing controls.

With information from El País

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