OREANDA-NEWSOver the past few months, Russia has seen an improvement in business activity, stabilization of financial markets, credit recovery and economic recovery in line with forecasts. This was stated by Elvira Nabiullina, who is the chairman of the Central Bank of the Russian Federation, at the congress of the Association of Russian Banks.

“I must say that the economic decline was less than many expected, the recovery, although uneven, is generally going in accordance with our forecasts, in particular, this can be seen from the monitoring of sectoral financial flows, which we began to carry out in the context of a pandemic. We see that deviations from the normal level of payments differ by industry, fluctuate from week to week, but the general trend towards normalization is indisputable, "Nabiulina said.

The Bank of Russia switched to a soft monetary policy (MP), lowering its key rate to a historic low of 4.25%. "This is necessary to keep inflation on track in the face of disinflationary risks associated with a significant drop in aggregate demand, but this direction of monetary policy will also help the economy return to potential faster," she said.

Nabiulina also added that the growth potential of the economy, which has been adjusted by the pandemic, has yet to be assessed. "Structural shifts in the Russian and global economies, which arose as a result of the pandemic, most likely influenced the potential of the economy. To what extent, this has yet to be seen and assessed," the head of the Central Bank concluded.