№32. Round table “The Central Bank of Russia: Fighting Inflation or Finances for development?”

Published: March 31st, 2017

The second day of the Moscow Economic Forum provided an opportunity for participants to hear expert opinions on the policy of the Central Bank of Russia. The moderator of the round table was made by Sergey Serebryakov, Director of CJSC "Petersburg Tractor Plant".

In the hall it sounded - the policy of the country's main financial regulator, which was overly focused on reducing inflation, categorically does not suit economists. The growth of the real economy is hampered by the absence of long cheap loans and a high refinancing rate. How to switch from fighting inflation to lowering interest rates and moving from deterrence to stimulation? The professional financiers, economic experts tried to find the answer to this main question.

Vladimir Gamza, the chairman of the CCI Committee on Financial Markets and Credit Organizations, presented the business view on Central Bank policy. According to the speaker, the country needs to develop investment policy; the growth of the economy depends directly on investments in it. Why is this process hindered today? Unfortunately, Vladimir Gamza believes, direct investments abroad have always been greater than foreign investments in the domestic economy; this is one of the weighty reasons. "Plus, we, in the face of the state, twice take out of the economy than China. Moreover, our financial market is a boundless ocean of credit organizations, their volume today is 90%, "the expert said.

The share of Russia's world GDP today is 1.5%, instead of 2% in 1991, and the number of people caught up below the poverty line has risen by one-third since 2012 - the president of the Association of Russian Banks Garegin Tosunyan reported disappointingly. How to help the population improve their well-being? According to the expert, it is obvious that if the country has high inflation, it is necessary to provide acceptable interest rates to business, thereby stimulating business development.

According to experts, today the high interest rate of the Central Bank (10%) is detrimental to our economy: the inaccessibility of loans does not allow the domestic business to develop, hindering the growth of investments, including foreign ones. The high cost of financing forces companies not to borrow money, but to save them. In the course is the maximum reduction in costs, including by cutting back the salaries fund. This leads to a decrease in the incomes of the population and, consequently, to a reduction in consumption. As a result, the whole economy suffers.