Bank of Russia comments on negative interest rates for euro deposits

There is no need to introduce negative interest rates on euro deposits, according to Russian Central Bank Governor Elvira Nabiullina. She also noted that Russian citizens should deposit their savings in rubles because this is the currency of their income and spending.

Nabiullina argued that for the ruble to maintain its purchasing power, there needs to be a low inflation rate in Russia as well as low inflation expectations. Bank of Russia head noted that “inflation will always be under the control of the state and the Central Bank.”

She also explained that recovery of the Russian banking sector is in its final stage and recently, the cases of license withdrawal have been on the wane. “We are working hard on purging and normalizing the banking system and our diagnosis is it is stable,” Nabiullina noted.

Previously, Central Bank Governor reported that euro transactions are no longer profitable for Russian banks and the Central Bank is making sure that the banks in Russia do not take extremely high risks in terms of foreign currencies. VTB revealed that by October, half of the Russian banks from the top ten cancelled euro deposits.

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