From inflation to deposits: key messages from Bank of Russia Deputy Governor Alexei Zabotkin

One of the main topics was inflation. The Bank of Russia currently maintains its year-end forecast at 4.5–5.5%, although the final assessment may still change. More precise figures will be available after the July meeting of the Central Bank, that is, by the end of summer. At the same time, the regulator expects that in the second half of the year the pace of price growth will gradually slow down and approach the target level. According to Zabotkin, one of the reasons for the difficulties has been the events of recent years, which have significantly affected the economy. In essence, over the past five years there has not been a single year in which the economy has not faced external shocks.

The situation with fuel was discussed separately. The Central Bank currently believes that the rise in fuel prices is more related to temporary circumstances rather than a long-term trend. Much will depend on how effectively the measures taken by the government work. If the situation stabilizes, this should not have a strong impact on overall inflation.

The issue of the key rate also did not go unnoticed. Zabotkin did not specify exact timelines for its change, since the decision will depend on further developments. The possibility of a rate cut remains, but the Bank of Russia will primarily focus on inflation and the state of the economy. At present, the Central Bank’s main priority is to achieve a sustainable decline in inflation and avoid abrupt decisions that could affect the economy.

Another important topic was the ruble exchange rate. According to Zabotkin, over the past year there have been no major changes in its behavior — the ruble continues to fluctuate within its usual range. At the same time, its value is influenced by several factors at once: export revenues, demand for imports, the attitude of citizens and businesses toward ruble savings, as well as the parameters of budget policy.

The discussion also touched on the opinion that a weak ruble may be beneficial for the state. Zabotkin refuted this view. In the short term, the budget may indeed receive higher revenues, but expenditures will subsequently increase as well. Due to inflation, the government has to raise social payments, increase public sector wages, and adjust other state expenditures. Therefore, such an effect quickly ceases to be an advantage, which is entirely unfavorable for the Russian economy.

Zabotkin also explained why the Russian system cannot simply switch to a fixed exchange rate like China. According to him, conditions in the two countries differ significantly. China has stricter capital controls, and therefore uses a different approach to foreign exchange market regulation. In Russia, a floating exchange rate allows the economy to respond more quickly to external changes and maintain independence in decision-making.

At the end of the conversation, the topic of a possible freeze on deposits was raised. Zabotkin stated that such rumors have no grounds. At the same time, he pointed out another important issue: despite high deposit rates, many Russians still expect stronger price growth. That is why deposit income is not yet perceived by most people as a way to live entirely off interest.

To summarize Zabotkin’s main statements, it becomes clear that the Bank of Russia is currently pursuing a cautious policy. The regulator is not making specific promises and will take decisions based on how inflation and the overall economic situation evolve in the near future. Nevertheless, upon closer examination, some positive forecasts and trends can be observed.

Author: Candidate of Economic Sciences, Senior Lecturer at the Department of World Economy and World Finance at the Financial University under the Government of the Russian Federation Kristina Davidovna Gvasaliya.