and the president of the people's republic of china will arrive in russia next week reported synchronously in moscow and beijing what is known about the visa spring in russia somewhere tents 16 regions in the zone of special risk. and somewhere else, a completely different element was already raging. this is the astrakhan region. there are already burning eight thousand hectares in the forest demonstration, disagreeing on the place de la concorde about how in paris and other french cities there were regular protests against pension reform. attraction of unheard-of generosity in moscow

moscow strongly condemns kiev's action in with regard to the orthodox faith, this quotes a statement by presidential spokesman dmitry peskov earlier, we recall that the ukrainian authorities ordered the leadership and monks of the ukrainian orthodox church of the moscow patriarchate to leave the monastery until march 29, the kiev regime. with these illegal actions , swearing against the church once again demonstrates its character, the very character with which we are fighting and the very character that we must sit down as a result of this operation that is taking place. this once again proves shows that everything we do is absolutely correct. once again, i would like to express my deep regret that these illegal actions of the kiev regime do not receive proper condemnation from the world community. we

condemn us now on our channel broadcast from the central bank glad to see you here we are starting a press conference of the chairman of the bank of russia elvira nabiullina and deputy chairman of the bank of russia alexei bobotkina. a and at the beginning, the chairman will make a statement following the meeting of the board of directors, please. good afternoon. today we have decided to keep the key rate at 7.5% per annum. economic activity continues to increase inflation dynamics remains subdued inflationary expectations of the population have noticeably decreased, but external conditions remain elevated, worsened somewhat, in general , risks are still biased towards pro-inflationary ones, so we continue to believe that the likelihood of a rate hike this year exceeds the likelihood of its cut. about the logic of our

decision. first rise in prices remains moderate compared to the end of last year, the average monthly rate of price growth is at a higher level. uh, they approached 4 percent on an annualized basis with an acceleration in price growth in january and a subsequent slowdown in february . this showed up in prices. for electronics building materials. furniture separate food items. at the same time, the theme of simply stable components of inflation remains moderate. and against this background , the dynamics of prices for services from june last year stand out, they rise noticeably faster than the prices of goods. accelerated growth in service prices is often interpreted as a sign of increasing sustained information pressure in the economy, which requires

a monetary policy response. this is due to the fact that these prices are less responsive to exchange rate dynamics and one-off factors in individual markets and are reviewed less frequently than the prices of goods, but at the moment it is clear that the rapid rise in prices for services means sustained inflationary pressure. while premature in the current imitation services. there are two components . the first is really, the stable part. it is related to the dynamics of wages. since the main share of the cost of services. this is the cost of labor resources. the second component is catch-up growth, and in the middle of last year we are seeing an adjustment to the price of services after the pandemic and after a sharp increase in the level of prices for goods and in the spring of last year. and

it is still difficult to assess in what proportion the current increase in prices for services is due to both components. however, over time, the adjustment will be completed and the growth rate of prices for services will be determined to a greater extent by sustainable factors. we will carefully analyze the data received in this regard. inflationary expectations of the population decreased significantly in march. respondents note a slowdown in inflation, as well as an improvement in expectations of the relative economic situation in the country and the prospects for personal financial situation. however, in general, the level of inflationary expectations of both households and businesses remains elevated. the second growth in economic activity continues the actual dynamics of gdp in 22nd year turned out to be more positive than our estimate. a significant factor that supported economic activity last

year was government demand. and at the beginning of this year, as operational indicators show, uh, including the indicator of the business climate of the bank of russia. has business activity continued to grow? noticeable improvement we are seeing in certain industries, manufacturing industry construction transport trade business continues to adapt to new conditions, of course , a certain difficulty with supplies equipment and components remain, but in general. e, according to our regional divisions, many enterprises were able to reorient themselves to analogues, or establish parallel imports of investment goods. e, the manufactures focused on internal demand develop. for example , automakers in several regions at once again load production capacities after a break, textile manufacturers in the central federal district are launching their own clothing brands, engaging in

vacant niches paper manufacturers products in the northwestern district were able to redirect supplies from the external market to domestic ones and expand the range. read more about adapting industries in the march issue of our regional economy report. infrastructural and logistical restrictions continue to be cleared up, new warehouse complexes appear , terminals, transport routes , this project is significantly supported by state investments. the recovery in business activity is reflected in the labor market and real wages continue to grow across a wide range of industries at historic lows in unemployment. underemployment continues to decline and the demand for workers in a wide range of professions is growing. consumer activity remains restrained, we expect it

to gradually expand. three factors will contribute to this, firstly, a decrease in motivation for savings behavior. in the meantime, people are still guided by the precautionary motive, which appeared against the backdrop of increasing uncertainty. last year. they keep forming an airbag which allows them to feel more confident as communication of certainty decreases and some comfortable amount of savings is reached. motivation to accumulate additional cash reserves may decrease secondly, rising wages and incomes will be a symbol for expanding consumer demand. thirdly, people will eventually get used to the new product range. it gradually recover new brands appear. instead of those who left, but consumers are not yet in a hurry to switch to them

detail. uh, the demand for clothing repair services has increased, that is, probably. people prefer not to buy a new one, as they often bought before, but try to extend the service life of what they are used to. nevertheless , sooner or later there will be a need to update the equipment of other things. we expect that external demand will be increasingly replaced by domestic e, not only at the expense of the public sector, but also due to the recovery of consumer activity, while we will evaluate it as an increase in demand, but will be correlated with opportunities increase in the production of goods and services. the third monetary credit terms, er, monetary credit terms have not generally changed and remain neutral. since the february meeting, ofz yields , as well as lending and deposit rates, have changed insignificantly. lending to the economy is growing. as for

the corporate sector, russian lending remains high here. some decline at the beginning of the year was due to large-scale advances in budget spending. they partially replaced the company's needs for short-term credit resources. pace retail lending is moderate, while the dynamics of individual components is not homogeneous , so in the mortgage segment, high growth rates of consumer lending remain. they are smaller in many ways, which reflects the cautious behavior of borrowers and lenders, as well as the effect of the introduced macrointerest measures. e, although bank loans remain the main source of growth in the money supply. the budget plays an increasingly important role, while the outstripping growth of the ruble money supply is associated with an increase in the demand for money and changes in it. structures. the lengthening of payment chains and

the rising price level increases the need for defense funds. the replacement of external debt with loans from russian companies also creates additional demand for money. therefore, although the rate of growth of the ruble money supply is high by historical standards , it is still consistent with the neutrality of monetary conditions. let me turn to the external conditions of the several meeting. they have deteriorated somewhat. so new restrictions on our foreign trade began to operate, but on the other hand, the debottlenecking in the transport infrastructure continues , new routes for the delivery of export and import goods are emerging. the physical volumes of imports, which increased markedly in the second half of last year, remain relatively stable. at the same time, difficulties with the sale of export goods remain, and physical volumes remain below the level of both the twenty-

first year and last year. the lifting of anti-epidemic restrictions in china will have a positive impact on the global economy for the russian economy. this could mean the intensification of mutual trade, the emergence of new opportunities for exports and imports. can the tourism industry receive an additional impetus? in assessing external conditions, i cannot but comment on the current situation in the banking system of the united states and europe , there is no direct impact on the russian financial system, but this new factor in itself adds uncertainty about the future trajectory of the world economy, the current situation exacerbates the situation for western central banks. uh, the problem of balancing between the goals of monetary policy and financial stability risks. on the one

hand, we see the financial sector's vulnerability to interest rate and other risks; on the other hand, the current inflationary pressure remains elevated. in the complex of this situation, the risks in the global economy may increase the risks of individuals and families of the global economy, despite the strong data that we have seen recently. for russia, the slowdown in the global economy means lower demand for our exports, which could put additional inflationary pressure on it? now about the main risks for inflation, our assessment of the balance of pro-inflationary and disinfection risks, has not changed significantly, all these factors that we noted in february persist. first, the trajectory of budget expenditures is the growth that occurred at the beginning of the year, we regard. how does intra-annual redistribution under current

conditions budget expenditures compensate for the decline in private sector demand. in the future, we will consider inflationary factors as a deviation from the announced trajectory of the normalization of budgetary policy. second, the labor market shortage of staff may increase in to a certain extent, the needs of the labor force can be met by migration flows. however, even in this case, the risks of slower growth in labor productivity relative to the growth of real wages remain significant, and thirdly, the dynamics of consumer demand with a savings model of behavior for consumer behavior can happen faster and things than we we expect in this case it is not excluded that even taking into account the error of bottlenecks that we observe, the increase in demand will outstrip. uh, sentence expansion. and finally, perhaps

further strengthening of sanctions restrictions decrease in demand for export goods may lead to a weakening of the ruble with subsequent price pass-through complicated logistics of trade settlements or other restrictions may also lead to an increase in prices for imported goods and reduce the ability to increase. and about our future dynamics decisions, inflation dynamics , uh, are generally in line with our forecast of five uh, seven percent for this year , economic activity is shaping up somewhat better, and the range of the average key rate for this year is seven nine percent per annum and into the neutral range. we expect to return in the twenty-fifth year. we traditionally update the calculation of the neutral rate in july as part of the preparation of the main directions of monetary policy. eh, but

at the same time, we can already say that it will be significantly influenced by three factors, first, the budget policy, in particular , the level of the structural budget deficit. secondly, the risk premium for our economy and thirdly, the level of foreign risk-free interest rates is likely. these factors will lead to an increase in our estimate of the neutral rate. however, their specific contribution. we will evaluate by the july meeting. we will make our further decision on the rate taking into account the need for inflation to return to the target in 2020 and stabilize around four percent. in the future, thank you for your attention. thank you, and colleagues, please, your questions nastya first question. savelyeva anastasia interfax hello, can you tell me

if any other delivery options were discussed today, except for preservation, whether the possibility of, uh, changing the wording of the signal, and uh, did you want to signal the market in some way, uh, the publication of data on a marked decline in inflation expectations. on the eve of the meeting of the board of directors, and one more question. and how do you assess the possible easing of movements, e restrictions on the movement of capital, namely there, e in terms of paying dividends from the accounts of the social security fund and the possibility of paying out for foreigners who have recently re-entered russia a. does this carry certain risks, can lead to volatility in the foreign exchange market and consequently affect inflation in the future? thank you we considered two options and keep the rate and a possible increase in the rate, but the consensus on the decision was to raise the rate, and the signal

is unconditional. we also considered. mm save the bet. sorry misspoke hmm thanks uh. the signal was also traditionally considered, but in the way we believe that the balance of risks has not changed. we considered it necessary to keep the signal that we gave , uh, last time and in fact. this means that the likelihood of a rate hike this year exceeds the likelihood of its decline. uh, as for the hmm signal through the release of inflation expectations. you know, we publish data on inflation expectations as soon as they come. even despite the fact that this is a week of silence, and we announced this decision some time ago in order for the market to have exactly the same information as it has. we have a moment of decision here no special signaling effect. we did not assume, but of course, we took this factor into account and took into account when it comes to mitigation

restrictions, and on the use of mm. e in relation to dividends. we support this proposal to liberalize the payment of dividends. e for e received from those investments that were made, and after march e of last year, no risks from this for volatility for inflation. we do not see, but we believe that this will increase the investment attractiveness and create more confidence for investors to hmm invest in the russian economy. now the economy needs investments. i think this is absolutely correct solution. colleagues, please, do not forget to introduce yourself to name your publication, and gulia is the last row. gulnara vakhitova rossiyskaya gazeta elvirsky for one thing, they mentioned that banking turbulence in the us and swiss markets does not have a direct impact

on our financial system, however. did this situation affect today 's decision, and besides the fact that this is another pro -inflationary factor in the future, if there is a crisis, uh, settles through which channel will uh, the impact on the russian financial system only through well, the conditional possibility of reduction. uh, oil is valuable, or some monetary factors. there, through the high inflation in these countries, as well as the second question i wanted to ask. do you agree with the opinion of a number of analysts that speculators have shaken the ruble exchange rate. here, yes at the beginning of the current year, do you see any, or maybe anomalous movements about the digital ruble. i wanted to clarify. why is it being accepted now in the accelerated mode? the law is based on the digital ruble, but it can lead to an outflow of liquidity from the banking system.

thanks. as far as hmm banking turbulence and impact on our decision? uh, of course, we took this factor into account, and other things being equal, it could be, uh, hmm ah , an additional pro-inflationary risk, we write about it directly, but on the other hand, we see mm, and some reductions, if possible, so to speak pro-inflation risks of the country's inflation expectations, we see a marked decline in inflation expectations. although they remain elevated and above what is in principle in line with our four percent target. uh, and uh, current dynamics inflation. it also remains moderate, and in the aggregate we see that the balance of risk for inflationary misinformation has not changed, but nevertheless what is happening in the external market. this is such an additional pro-inflationary risk. uh, the main channel,

though. this is really through e demand for goods. disk exports, and this is a hmm derivative, let's say, from the pace, uh of the global world economy, uh, we believe that the risks to the financial sector are direct negative. implications for hmm the financial sector. they insignificant and related to the fact that our financial system is less connected to the global financial system . world inflation in countries, world prices, yes, and these are prices. hmm, at which the export parity for our goods looks, that is, such an influence can be, uh , alexei if you want to add additional monetary factors, please, well, i ’ll probably emphasize again that everything is still

limit the impact of the global economy, oil prices. not worth it. uh, you still need to think about it more complex as changes, and terms of trade and yes, in the event that there is a slowdown in the global economy as a result of tightening monetary conditions or financial conditions. uh as a result. well , this turbulence in the banking systems of the us and europe then, uh, it will most likely be a pro-inflationary risk for us, as it always happens at the moment. uh, worsening, uh conditions. uh, on the export side. for us it applies to the prices of all goods. and also well , the volumes that will be bought from us under these conditions. ah. well, the medium-term horizon will depend strongly e. naturally on how proportionate and circumstances. we will take action in a timely manner. and in what combination on this uh, foreign regulators. uh, will uh respond in terms of

murphy's financial stability. activation of the e tool, as the key rate of the world e monetary credit policy. thank you for the situation on the foreign exchange market, some so-called speculative actions. yes we are do not see, but really. uh were hmm uh were uh, course moves in mid-march. this is especially due to the fact that we saw a concentration of open positions in anticipation of expiration on the exchange, and futures contracts. and hmm, in principle, due to the fact that the liquidity of the foreign exchange market has decreased. e, therefore, such price fluctuations can occur and we are now considering together with the stock exchange. uh, it may be worth perfecting the design of the trades in order,

among other things, to extend the settlement time in order to neutralize such fluctuations. well and despite the fact that this is due to such a market normal market practice, we will still take a close look at this case on the subject. uh, manipulation, as we consider any normal behavior in the market. here, as for, uh, the allegedly accelerated consideration of the draft law on the digital ruble. it is not accelerated at all. it is absolutely planned. and we hmm are moving according to the plan and from the point of view of hmm testing from the point of view of the experiment of the pilots. uh, hmm, we u see, and the positive effects of diverting digital ruble fears of banks, some that they will have problems with liquidity discussed in detail in detail for several months. we do not see such risks, a and hmm a , so we will move as

planned. the next question from kursk is online and anna korshunov please hello, according to experts, the budget deficit in 2022 may be one and a half to two times more than planned , this raises concerns that it is possible that taxes on business will increase in the face of increased secondary effects imposed sanctions, as well as the tightening of the rhetoric of the central bank towards a possible increase in the key rate, will this not lead to difficulties in financing not only investment, but also the current activities of russian enterprises. yes, thank you very much for your question. i would like to emphasize that , ah, perhaps the key rate hike you are talking about, it is aimed at bringing down inflation, and this is an absolutely necessary reduction in inflation

in order to make credit available, especially long-term credit. imagine that mmm we do not raise the rate inflation increases lending rates, while remaining high and uh, precisely in order to make, uh, credit resources available and at the same time maintain price stability when pro-inflationary risks materialize. if necessary, we will be ready to raise the rate, but going back to the beginning of your question. hmm, in order to avoid the risk and increase in taxes, including the increase in rates, of course, the budget deficit must be controlled and it is necessary to have long-term fiscal sustainability. yes

alexey borisovich, please, if hypothetically taxes increase in the economy, then, other things being equal, the budget deficit becomes smaller, the contribution of the budget to the dynamics of the money supply is also reduced, and this reduces the need to maintain a higher level of rates . thank you very much. that the increase was also considered, but only the minimum step was considered or there were some variations and the second question the ministry of finance reported that banks will also take part in depreciation to the budget. uh, i would like to understand, evaluated faces b. how many banks can participate in this and whether it will not be an unnecessary burden for them thank you we did not discuss the step of raising the rate in detail. yes, we discussed this possibility of raising the rate, and secondly, with regard to the contribution to

the country's budget of the bank. to be honest, we did not find good reasons for banks to make exceptions to the general rule in this situation. the only thing. er, what is our position. and what should it be, mmm, if banks fall under this general rule, then it should be those banks that do not use our regulatory relaxation. please, rita margarita mordovina rbc i will have two questions, the first one is related to raiffeisen bank and sberbank, which a-a developed a plan for the exchange of european and russian assets. more precisely, raiffeisen developed it, but is this plan coordinated with the bank of russia and in general, how does the regulator look at such plans, when russian sanctioned banks can exchange e with assets with western

banks. and the second question concerns currency conversion, according to our data, some banks russian had difficulties with the conversion of the currency of legal entities into rubles at the same time . no such problem is observed. but, tell me, please, are you aware of this problem and does it require any response from the bank of russia, any recommendations? thanks. yeah, regarding the exchange of assets between banks, and hmm well, we don't have any common position here. this needs to be looked at, is it necessary to coordinate first, then the deal, if we are talking about e, while we can talk about transferring money abroad, of course, you will need to obtain special permission. yes, and how we did not receive proposals for these specific transactions, so i cannot comment here regarding the conversion of the difficulties of converting currencies, e.g. legal ones.