World Economy

Russia to Stick to Tight Monetary Policy

Russia to Stick to Tight Monetary PolicyRussia to Stick to Tight Monetary Policy

 Finance Minister Anton Siluanov defended Russia’s tight monetary policy on Friday, saying it was needed to combat high inflation and would continue in the “coming years”.

Siluanov told reporters on the sidelines of a banking conference in St Petersburg that Russia could no longer bear the same liabilities that it could when the oil price was at around $100 a barrel, CNBC reported.

He also urged closer work between the Finance Ministry and Russia’s central bank which is in talks with banks over a new funding instrument in China’s yuan currency, the bank’s first deputy governor, Ksenia Yudayeva, said.

The Russian central bank opened a swap line with the Chinese central bank last year but has not used it yet.

“At the moment talks with banks are going on, a discussion about which concrete instrument there will be. We have sent them proposals, now their responses have arrived. We will discuss the matter further,” Yudayeva told journalists at a banking conference in St Petersburg.

Meanwhile, Russia’s relations with it global counterparts have sunk to new lows as Moscow appears to have refused an olive branch from one of its biggest trading partners, Germany.

On Thursday, Germany’s Foreign Minister Frank-Walter Steinmeier said that the Group of Seven (G-7) leading industrialized nations should allow Russia back into the group in the longer term.

“I believe that we cannot have an interest in keeping the G-7 format a G-7 format in the long term,” Steinmeier told journalists Thursday after he had met with his Ukrainian counterpart ahead of a G-7 summit on June 7-8, according to Reuters.

The G-7, which includes Britain, Canada, France, Germany, Italy, Japan and the United States – allowed Russia into the powerful group in 1998 only to suspend it following the annexation of Crimea and conflict in Ukraine last year.