Russian Central Bank Governor Elvira Nabiullina has dismissed lawmakers' calls for stricter currency controls in response to the weakening rouble, warning of sharp devaluations and sticking to the bank's inflation-targeting regime. The rouble has been tumbling for several months, dropping to a one-year low of 83.5 against the dollar. The fall has been attributed in part to exports losing value and imports recovering quickly, Nabiullina told lawmakers in the State Duma, Russia's lower house of parliament. The Central Bank's governor insisted that tighter restrictions would have negative consequences for Russian businesses and the economy's growth rate.
Russia's current account surplus fell by around 73% in January-March compared to the previous year, shrinking to $18.6bn. Nabiullina also highlighted that current export revenues were based on a time when oil prices were lower than they are now. Despite a recent dip in the rouble, officials had previously praised the currency's strength as evidence of Russia's resilience to sanctions pressure. However, some lawmakers called for stronger capital controls after the rouble fell almost 25% following the imposition of an oil price cap on Russian exports at the beginning of December 2022.
Nabiullina's firm stance on inflationary risks may indicate that the Central Bank intends to maintain or raise interest rates at its next board meeting on 28 April. The bank's inflation target is 4%. According to Nabiullina, several factors, including external sanctions and restrictions on exports, have contributed to a more pro-inflationary climate this year. The governor's warning about the impact of exchange rate fluctuations on inflation suggests that the bank's hawkish stance will continue in the near future.
