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State Subsidies and Support Increase Causes Leads to Tougher Monetary Policy — Nabiullina

Increase in subsidies and state support programs leads to tougher monetary and budgetary policy, said Elvira Nabiullina, Russia’s Central Bank Head in course of the forum «RUSSIA CALLING!».

«Misinter Siluanov is right is saying that the monetary policy is to become tougher if we want more subsidy and assistance programs, operating through budget. If we are to alleviate monetary conditions almost for all, we will have fewer opportunities for structured budgetary policy. It’s some kind of a trade-off. Monetary and budgetary policies are interconnected, of course, and they require cautious attitude», said Nabiullina.

She also stressed that if business doesn’t reinvest the profit gained, then the problem is not only in interest rate on loans.