Vladimir Putin, the president of Russia, stated on Tuesday that the country’s central bank had to raise rates to 12% last month due to rising inflation, despite the ongoing conflict and anticipated problems with Ukraine, and he warned that the economy would suffer if price increases were allowed to spiral out of control.
Is the Russian economy in trouble?
Russian President Vladimir Putin attended a meeting with representatives of business, officials and other participants of the 8th Eastern Economic Forum via a video in Vladivostok, Russia and had a lot of points to convey about the economic situation of the country.
” In conditions of high inflation, it is practically impossible to form business plans, ” said Putin at the Eastern Economic Forum in Vladivostok.
He further went on to state that he had several problems with the Russian currency rouble’s volatility and that the authority had a cache of tools to keep the currency and markets under control.
The rouble had risen to its highest level against the dollar in over six weeks in early trade on Tuesday, helped by progressively rising exporters’ sales of foreign currency and expectations that the central bank would raise rates again this week.
Vladamir Putin further went on to explain that the government saw no need to raise taxes for the time being. However, it has imposed a windfall profit tax on a few companies this year to increase budget revenues.
According to several analysts, they believe that another hike this Friday is imminent. Top bankers have also said that a hold is more likely, especially as the rouble has strengthened this week.
Putin ended the conversation by stating that the central bank had acted promptly the previous month and noted that the high rates restrain lending and economic growth as well.
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