‘Utter nonsense’: Russia’s Central Bank head slams calls for freezing savings deposits and withholding interest payments
At a plenary session of the State Duma on Tuesday, Russian Central Bank head Elvira Nabiullina denounced calls for freezing Russians’ savings and withholding interest payments on these accounts as “utter nonsense”:
This idea has become genuine alarmism, with claims that banks supposedly can’t pay the raised interest rates on deposits. Sometimes, it’s even said there are so many deposits now that they will all flood the market when we begin lowering the interest rate, causing a sharp acceleration of inflation.
Nabiullina assured federal lawmakers that professional economists don’t entertain these “utterly nonsensical” scenarios.
Last month, Russia’s Central Bank raised its key interest rate to a record 21 percent to combat inflation. In her remarks on Tuesday, Nabiullina insisted that the bank is now at a “turning point” in its anti-inflation campaign. She told the State Duma that she believes Russian regulatory policy will reduce inflation to 4–4.5 percent next year and then stabilize it at around 4 percent, allowing reductions in the key rate sometime in 2025, “provided, of course, there are no additional external shocks.”
The Russian Central Bank’s rising key rate has led to higher interest rates on loans, including mortgages.