Deputy Anatoly Aksakov, the head of the Russian State Duma Committee on Financial Markets, told TASS on the sidelines of the Sept. 3-6 Eastern Economic Forum in Vladivostok that Russia’s central bank could shortly raise domestic interest rates from 18% to 20%. This is the standing monetarist “anti-inflationary” approach of Bank of Russia Governor Elvira Nabiullina.
Aksakov said: “The Bank of Russia is acting professionally, with restraint, understanding that one of its main tasks is to ensure the stability of the ruble, the level of inflation, and the key rate is its main tool. The Central Bank has raised it to 18%, and I do not rule out that in September, it could raise it to 20% if the inflation trend continues to rise. If prices continue to rise, the Central Bank may raise the key rate, if not in September, then at the next meeting when this issue will be on the agenda.”
Aksakov also told TASS that Russia is looking into using central bank digital currencies for settlements. “We are following the experience of our colleagues from China in introducing the digital yuan with great interest, including studying proposals for its use in foreign trade. Of course, digital currencies of central banks will be considered as one of the settlement instruments at the bilateral level, as soon as the necessary technological and regulatory conditions for this are created,” Aksakov said.
These comments are also in line with Nabiullina’s efforts to limit the BRICS new currency discussion scheduled for the Kazan summit to simply establishing a unit of account for trade and settlement of accounts among the BRICS nations (with possible central bank digital currency add-ons), without in any way breaking from the floating rate speculative dollar system.