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Kremlin says Russia's economic reality has changed, stands by central bank

Economy Feb 28, 2022 06:35AM ET
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© Reuters. FILE PHOTO: People walk past the Central Bank headquarters in Moscow, Russia February 11, 2019. REUTERS/Maxim Shemetov

MOSCOW (Reuters) - The Kremlin on Monday said Russia's economic reality had changed but saw no reason to doubt the effectiveness and reliability of the central bank, which hiked interest rates to 20% as it sought to shield the economy from unprecedented Western sanctions.

The bank has also introduced some capital controls as the West seeks to restrict its ability to deploy $640 billion of forex and gold reserves and cut Russia's major banks out of the SWIFT financial network, making it hard for lenders and companies to make and receive payments. Those moves have sent the rouble tumbling to record lows.

"The economic reality has considerably changed," Kremlin spokesperson Dmitry Peskov told reporters. "These are heavy sanctions, they are problematic, but Russia has the potential to offset the harm."

"Russia has been making plans for quite a long time for possible sanctions, including the most severe ones. There are response plans, they were developed and are being implemented as problems appear."

Peskov said sanctions introduced against President Vladimir Putin himself were pointless.

"(Putin) is quite indifferent. The sanctions contain absurd claims about some assets," Peskov said. "The president has no assets other than those he has declared."

The West is seeking to punish Russia for its invasion of Ukraine. Russia calls it a "special military operation" aimed at protecting civilians.

Putin will work on economic issues today, Peskov said, meeting with officials including Central Bank Governor Elvira Nabiullina, Finance Minister Anton Siluanov, and German Gref, CEO of dominant lender Sberbank.

Asked about the central bank's handling of the crisis, Peskov said: "We have had no reason to doubt the effectiveness and reliability of our central bank. There is no reason to doubt it now."

Kremlin says Russia's economic reality has changed, stands by central bank
 

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Comments (7)
Harish Sarma
Harish Sarma Feb 28, 2022 10:11AM ET
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go on rest of world. The punishment should be also in individuak level of highest authority by isolating the russian economy. India , Japan, Norway should be the authority to penalize russia
Roger Pruzansky
Roger Pruzansky Feb 28, 2022 8:24AM ET
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when the entire world has shined you and thousands of your people risk treason to protest maybe time to rethink
Roger Pruzansky
Roger Pruzansky Feb 28, 2022 8:24AM ET
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shunned
KT Gray
KT Gray Feb 28, 2022 7:51AM ET
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Russian people and Russian military need to reject and oust Poo-ting.
Sameer Joshi
Sameer Joshi Feb 28, 2022 7:50AM ET
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Well they will have to pay billions for damage done to ukraine
Sameer Joshi
Sameer Joshi Feb 28, 2022 7:50AM ET
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Well they will have to pay billions for damage done to ukraine
Jayme Oliveira Jr
JJ__ Feb 28, 2022 7:27AM ET
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If the West really had freedom values it would not do business with Russia nor China since WWII...
Xavier Casaled
Grindtrust Feb 28, 2022 7:27AM ET
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Neither with Saudi Arabia...
Matt Skinner
Matt Skinner Feb 28, 2022 7:27AM ET
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I think the thought was to work with them and try to get them on your side. To use econimic ties to bind. However you see how it worked out for germany. Russia did whatever it wanted and now germany is in a tough spot from relying on them. Does seem like the path foward is to try to minimize business
Jack Peterson
Jack Peterson Feb 28, 2022 6:47AM ET
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Good luck with that 20% interest rate hike, I’m sure your peeps will love that one.. the EU better get ready for the next refugee crisis
Edward Chong
Edward Chong Feb 28, 2022 6:47AM ET
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oh the eu better get ready for an energy crisis. they will faint soon.
 
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