The Bank of Russia commented on criticism of the Central Bank

The press conference of the Bank of Russia has begun after the decision on the key rate was made, which the regulator decided to leave unchanged at 21%. The Central Bank Chairperson Elvira Nabiullina and the Deputy Chairman of the Central Bank of the Russian Federation Alexey Zabotkin are taking part in it.

When the key rate is raised, criticism of financial regulators increases: this is a common occurrence. However, the loss of independence of central banks can cause much more harm to the economy, as evidenced by examples from recent years. This was stated by the Chairman of the Central Bank of the Russian Federation Elvira Nabiullina at a press conference of the Bank of Russia on Friday, April 25.

"When the rates are high, the criticism intensifies... Why was independence introduced in central banks? Because society was interested in stable macroeconomic policy... Independence of central banks is an indicator of maturity of (state) policy. Why did (many countries in the world) go this way? So that the government would not be tempted to sacrifice price stability in pursuit of economic growth... In practice, the departure from central bank independence hurts trust in the national currency. The consequences have to be compensated for over a long time. It is easy to lose trust, but very difficult to restore it," the head of the regulator emphasized.

Recall that the day before, US President Donald Trump criticized Federal Reserve Chairman Jerome Powell, accusing him of being unwilling to lower interest rates.

Analysts often cite Turkey as a recent example of a country losing its central bank independence, where the head of state's decision led to a sharp decline in the Turkish lira and an increase in inflation. As a result, in 2024, the leadership had to return to a global approach to regulating the financial sector.

Let us recall that on March 19, the State Duma Control Committee, in its conclusion to the report on the work of the Accounts Chamber in 2024, noted the need to assess the economic feasibility of the current key rate and conduct a full-scale audit of the accounts and operations of the Central Bank of the Russian Federation. This time, parliamentarians requested additional information on a number of issues affecting the impact of the regulator's decisions on the economy. It should be noted that the possibility of checking the economic feasibility of the Bank of Russia's key rate by the Accounts Chamber is not directly enshrined in Russian law.

It is interesting that this is not the first time that MPs have taken a critical view of the work of the Central Bank of the Russian Federation before making a decision on the key rate. A similar scenario played out in December. Then the leader of the party "A Just Russia - For Truth", deputy Sergei Mironov called the current activities of the regulator sabotage and accused it of "carrying out orders" of the IMF. The parliamentarian pointed out that the Central Bank justifies the tightening of monetary policy (MP) by the fight against rising prices, but since July 2023, when the regulator raised the key rate for the first time, inflation has doubled. In addition, the earlier meeting of the president with big business was held behind closed doors, which usually did not happen. The press also linked this to the desire of entrepreneurs to discuss the actions of the Central Bank of the Russian Federation with the head of state.

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