The Central Bank explained the problem faced by the Russian economy

the Russian economy as a result of the pandemic coronavirus infection COVID-19 and falling oil prices, “faced with an unprecedented shock.” This is stated in the Russian Central Bank financial stability review.

At the same time, the document says, the regulator is “the ability to conduct countercyclical monetary and macroprudential policy to achieve financial stability and support aggregate demand”.

“easy monetary policy supports lending and provides a stable dynamics of interest expenses of the banking sector. Waivers and reduced macro-prudential surcharges will allow the banks to gradually cover the losses and to ensure the continuity of its activities”, — stressed the Central Bank.

overall, the survey says, “the global spread of coronavirus infection COVID-19 led to global recession and destabilized the world financial and commodity markets.”

“According to IMF estimates, the drop in world GDP in 2020 will be the most significant since the great depression. Already, the crisis is accompanied by a sharp rise in unemployment in some countries, significant industry effects, a reduction in investment activity, worsening credit quality of borrowers and Bank portfolios. The situation in global financial markets, despite some stabilization remains fragile,” — says the Bank of Russia.

moreover, the regulator warns that “the crisis could worsen if the passage of the peak of the epidemic will be delayed or in the case of the second wave, as well as in scenarios of massive corporate defaults and sales of assets in the market.”

the IMF predicts that the fall in world GDP in 2020 is 3%. According to the April baseline forecast of the Central Bank of the Russian Federation, the reduction of output in the Russian economy by the end of the current year will amount to 4-6%.

Recall that the Russian economy in February—March 2020 was under the powerful impact of two negative factors — the rapid spread of the pandemic coronavirus infection COVID-19 and its deleterious effect on the global economy and collapse in oil prices. Against this background, the rouble significantly depreciated against the dollar and the Euro. Reacting to the situation, the government and the Bank of Russia adopted several packages of measures to support the economy and citizens.

may 11, Russian President Vladimir Putin announced the end of may 12, a single period of days off, entered March 30, in the fight against COVID-19. He also announced the beginning of implementation of the third package of anti-crisis measures, under which the state, in particular, will increase targeted support for families with children, small businesses, individual entrepreneurs and self-employed. In addition, Putin instructed the government to prepare a national plan for long-term development of the economy, the recovery in employment and incomes.

on 27 may, the Minister of economic development (MED) of the Russian Federation Maxim Reshetnikov said that the total cost of anti-crisis measures to support the Russian economy, aimed at combating the impact of the pandemic coronavirus has reached 3.3 trillion rubles.

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