Russia: Central Bank leaves its rate unchanged, but worries about the external environment

The headquarters of the Central Bank of Russia, in the city center of the capital of the Federation, Moscow, on March 19, 2021. AFP - KIRILL KUDRYAVTSEV

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After the FED, the ECB and the Bank of England, it was the turn of the Central Bank of Russia to present its monetary policy this Friday, December 16.

The bank maintains its key rate at 7.5%.

In the wake of the first international sanctions, the institution had suddenly raised its rate to 20%, before making several cuts, reassured by the country's macroeconomic indicators.

This time, while inflation seems to be calming down, the difficult external environment does not leave the Russian economy unscathed.

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If it is still too early to assess the impact of Western sanctions against Russian oil, observed Elvira Nabiullina, the president of the Central Bank of Russia, the logistical problems are more and more palpable.

Starting with the labor shortages caused by the partial mobilization.

Decreed on September 21 by Vladimir Poutine, to support the Russian army engaged in Ukraine, this mobilization deprived the economy of the country of 300,000 workers.

On the other hand, several indicators are improving, notably the rise in prices which slowed to less than 12% in November. 

Elvira Nabioullina also deemed the country's foreign exchange reserves sufficient.

Part of these reserves will be used in the event of a financial crisis, and the other will respond to different geopolitical scenarios, according to the formula used by the governor.

Moscow has, in recent months, increased purchases of gold and Chinese yuan.

A way to circumvent the sanctions.

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