MOSCOW, Oct 28 (Reuters) - Russia has limited room to lower its key interest rate, Central Bank Governor Elvira Nabiullina said, stressing that the country was economically ready to cope with any new sanctions against Moscow should Joe Biden become U.S. president.
The bank opted to hold its benchmark rate at a record low of 4.25% last Friday but left the door open for further cuts to support the economy as the COVID-19 situation continued to deteriorate.
“We see some room for further reduction, it’s limited,” Nabiullina said in an interview with CNBC aired on Wednesday.
“It’s not so large as it was before, but we will decide how and when to use this room according to incoming data.”
The central bank will next meet to discuss interest rates on Dec. 18.
When asked about possible new sanctions against Moscow if Democrat Joe Biden wins the Nov. 3 U.S. presidential election, Nabiullina said Russia has been living with sanctions and the threat of new ones for some years now.
“It is not our policy to predict when these sanctions can occur, but to prepare our economy, our financial sector to withstand new geopolitical risks,” she said.
“That is why we keep our buffers at maybe a higher level than other countries and higher than international standards recommend.”
Russia has the world’s fourth-largest gold and foreign currency reserve, worth $585.3 billion as of Oct. 22 , and has made concerted efforts to mute the potential impact of sanctions since 2014.
Opinion polls show a solid lead for Biden in the run-up to vote, which has reduced appetite for Russian assets as investors fear greater friction between Washington and Moscow.
Biden has long maintained a tough stance towards President Vladimir Putin’s government and was vice president when the U.S. enacted harsher sanctions on Russia’s financial, energy and defence sectors as punishment for the 2014 annexation of Crimea. (Reporting by Alexander Marrow and Elena Fabrichnaya; Writing by Alexander Marrow; Editing by Andrey Ostroukh, Kirsten Donovan)
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