According to the statement by the mission of the International Monetary Fund (IMF) made following consultations1 in Moscow, the monetary and macroprudential policy measures implemented by the Bank of Russia have helped limit the economic decline and boost the GDP recovery in Russia. As forecast by IMF experts, the economy is expected to contract by 4% in 2020 and to grow by nearly 2.5% in 2021, provided that epidemic risks gradually diminish.
As regards the monetary policy, the IMF mission stressed that the transmission of this year’s key rate reductions to loan and deposit rates was efficient. Nonetheless, the assumptions of the forecast are highly uncertain due to the impact of the coronavirus pandemic, as noted by the IMF mission. Moreover, IMF experts emphasise that disinflationary risks induced by moderate demand will prevail in 2021. The IMF forecasts that inflation will stay below its target for a certain period, equalling 3.0–3.5% in 2021 H2. As stated by the IMF mission, this is evidence that further monetary policy easing would be reasonable in the next few months.
IMF experts also emphasise that the banking sector has a high level of liquidity and capital adequacy. However, they recommend not to extend the measures aimed at mitigating the aftermath of the coronavirus pandemic for the banking sector, namely the regulatory easing related to loan classification, since this will complicate the assessment of the real quality of banks’ assets.
The full text of the final statement is available on the IMF website.
1 On 9–20 November 2020, the IMF mission carried out virtual consultations with the representatives of the Bank of Russia and a number of Russian government agencies in accordance with Article IV of the IMF’s Articles of Agreement.
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