(Reuters) – Russian Central Bank Governor Elvira Nabiullina gave a news conference after the central bank cut its benchmark rate to 9.5% on Friday.

Nabiullina spoke in Russian. The quotes below have been translated by Reuters.

“Despite the fact that currency restrictions have been introduced, we adhere to a floating exchange rate policy… Its movement affects different groups of economic actors in different ways. Exporters are often interested in weakening the exchange rate and importers to reinforce this.”

“As a rule, the inability to pay sovereign debt leads to investor flight, a decrease in the value of state assets. But in the case of Russia, this has already happened. No immediate consequences ( of a declared default) is This situation has no effect on the state’s fulfillment of its obligations to residents who have purchased OFZ treasury bills.

“The impact will depend on the possibility and the extent to which it is possible to redirect flows to other markets. Secondly, it will depend on the price factor, which in turn will depend on the global situation as a whole and the rate growth of the world economy.

“The (inflationary) expectations of businesses and those of the population remain well above the levels they reached with inflation close to 4%.”

“As for the slowdown in price growth, we expect it to continue.”

“The very slow pace at which prices are rising in recent weeks cannot be considered persistently low inflation. To a large extent, this can be explained by a correction in prices after a sharp rise in March. Pro-inflationary risks remain strong.”

“A drop in Russian exports could carry disinflationary risks if companies are forced to send goods to the domestic market.”

“We do not include them in our baseline forecast, and our policy is to ensure that such a risk does not materialize.”

“The risk of secondary sanctions remains.”

“We see that our exports have not fallen as much as we had originally expected. The effect of the sanctions is probably less acute than we feared. This shows the adaptability of companies. But it is premature to say that the full effect of the sanctions has manifested itself.”

“Under the sanctions and restrictions, foreign exchange transactions for banks and individuals carry certain risks. Banks are trying to reduce the volume of foreign exchange transactions and may even stop offering certain foreign currency-denominated products. It is important that all this be done with respect for the rights of bank customers.”

“We believe that an improvement in the outlook for economic development, indexation of pensions, will contribute to an increase in consumer activity.”

“The budget for next year is under discussion. We consider it very important to come back to one or another budgetary rule in the future and to understand what the budgetary framework will be, because it affects monetary policy.”

“The situation is uncertain, a lot of things are changing rapidly. It is impossible to predict our (key rate) movement every time.”

(Reporting by Reuters; Editing by Kevin Liffey)

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