Nabiullina called an excess of preferential lending a path to a dead end – Kommersant

The head of the Central Bank, Elvira Nabiullina, warned against the widespread use of preferential loans. As the head of the regulator explained at the VTB “Russia Calling!” forum, the Bank of Russia in this case will be forced to maintain a higher rate and this will lead to a “vicious circle.”

“I would like to warn against using preferential programs too widely, because the more preferential programs there are, the more we are forced to maintain a higher rate for everyone else,” said Ms. Nabiullina.

The head of the Central Bank noted that preferential programs allow a select few to receive cheaper loans, but everyone else pays for them. In her opinion, one can “enter a vicious circle” when there is a temptation to respond to a high key rate by expanding preferential programs. “The programs are expanding, we are increasing the rate. It seems to me that this is a dead end and, of course, this is not where we need to go,” says Ms. Nabiullina.

At the end of October, the Board of Directors of the Central Bank raised the key rate by 200 basis points, to 15% per annum. Overall, it has doubled since July. Head of the regulator Elvira Nabiullina admittedthat the rate could be increased again before the end of the year.

About the reasons for the rate increase – in the publication “Kommersant” “Race with inflation”.

Leonid Uvarchev