On the system of fines in the financial market and the disinflationary budget: Nabiullina - on the main provisions of the DKP

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The Chairman of the Bank of Russia, Elvira Nabiullina, presented the key provisions of monetary policy at the International Banking Forum. According to her, the predictability of fiscal policy is recognized as the most important factor in making decisions on the key interest rate, and a balanced budget is considered a preferable option compared to an increase in the deficit, which has a positive effect on fiscal sustainability, inflation and interest rates.

Nabiullina noted that the growing government deficit requires maintaining higher interest rates and limits the possibilities of lending to the private sector.

The draft budget is considered as a disinflationary factor, while the short-term price reaction to the VAT increase is expected to be moderate, by analogy with 2019, when a 2% increase in VAT led to an increase in inflation of only 0.6%.

The head of the Central Bank also reported on the revealed massive violations of consumer rights in the financial market and proposed to tighten the system of fines: to impose sanctions in the amount of 0.1% of own funds for the first violation and up to 1% for non-compliance with regulations, emphasizing the need to quickly restore order in this area.