Elena Panina, a former State Duma Deputy who is now the director of the Institute of International Political and Economic Strategies in Russia, published an article on the Institute’s Telegram channel (https://russtrat.ru/) criticizing the high interest rate policy of Russia’s Central Bank for worsening the impact of the Western sanctions on Russia. Her Nov. 28 article, which was reposted by economist Sergey Glazyev on his Telegram channel, is headlined: “Western Sanctions and the Policy of the Central Bank of the Russian Federation Surprisingly Complement Each Other.”
Panina wrote: “Russian banks expect the key rate [now at 21%] to be raised to 23%, to be maintained in 2025, and a storm on the interest rate market,” citing comments by Dmitry Pyanov, First Deputy Chairman of the Management Board of VTB bank. “Such a rate drives the Russian economy into a systemic crisis,” according to Panina. “Even Rostec cannot make a profit with the current key rate, which means production is falling. If production is falling, then the real sector of the economy is not developing. Since the economy is not developing, where will the money come from to ensure payments on bank deposits, whose rates are based on the key rate?... In simple terms, banks need to have hundreds of billions of rubles on hand to pay off depositors. Where are they supposed to get them from?”
