Money
Russia's Central Bank Overcooled Economy With 10 Percent Real Interest Rates
The Duran
Putin's Loyalty to Nabiullina Is Costing Russia Growth
"My point of view is that the economy cannot exist for long at extremely high rates uh real high rates that exist today and our real rates are around 10% that is the central bank's policy rate minus current inflation and 10% is a rate that can be applied in the short term in order to cool the economy. What we see today in my opinion is quite obvious. We have already overcooled the economy."
German Gref, CEO of Russia's largest bank Sberbank, publicly stated that Russia's Central Bank has overcooled the economy by maintaining real interest rates at 10 percent, far above what businesses can sustain. Despite central bank chief Elvira Nabiullina's recent half-point cut from 15 to 14.5 percent, real rates remain punishingly high as inflation falls, with small businesses and consumers paying 12-20 percent on loans. The criticism is notable because Gref, who owns Sberbank through the Russian central bank, has traditionally been viewed as a monetary hawk aligned with liberal economic policy.
From this episode
The Duran