MOSCOW, Oct. 27The key rate of the Bank of Russia does not directly affect the cost of specific goods, but limits the growth of the general price level, said the head of the Central Bank, Elvira Nabiullina, at a press conference on Friday.
““We have a key influence on all goods and services, but naturally, there are goods and services whose consumption does not depend on price, … then suppliers and manufacturers have more opportunity to raise prices,” she said.
With high inflation and rapid growth in demand, prices for these goods can indeed grow faster than the general price index, the head of the regulator added.
“Of course, with the help of the key rate, we do not directly influence specific goods, neither cucumbers nor fuel, but we limit the growth of the general price level and this means that, for example, with inflation of 4%, your expenses on the consumer basket on average growing by 4%,” she continued.
At the same time, the head of the regulator added that if prices for essential goods and services in this basket grow faster, then the demand for other goods will decrease, and thus prices for other goods will rise less.
Nabiullina noted that the key rate also affects the indexation of tariffs, because it usually follows accumulated inflation. “We use the key rate to influence inflation and, accordingly, if the overall price index is lower, then the indexation of tariffs may be lower,” she said.
At the same time, in order to limit the rise in prices for specific goods, it is necessary for the government to take measures. “It is taking temporary measures and regulating the situation with supply and demand in specific markets, as, for example, there were restrictions on the export of gasoline and diesel fuel in September,” Nabiullina explained.