Russian Central Bank Governor: Fluctuations in oil prices are dangerous for Russia - growth = risk, surplus = inflation
When oil prices fall, the budget runs a deficit and the ruble depreciates, putting Russia in a difficult situation; when oil prices rise due to the Middle East crisis, according to the Russian Central Bank Governor Nabiullina, it is even more dangerous.
Nabiullina's explanation is: Yes, higher oil prices mean Russia will make a lot of money now, and the ruble will strengthen. But this is just a short-term pleasure.
In the long term, high oil prices will suffocate importers from the East and West, causing domestic inflation and a decline in demand, and eventually they will no longer buy Russian resources.
The result is - a new supply shock, with a gap in logistics.
This logic is known as an "iron law": Things are bad today because tomorrow may be worse.
The most ironic part is yet to come.
Amid these "apocalyptic warnings," the Russian Central Bank suddenly announced a rate cut, from 15.5% to 15%. In other words, while using global fires and demand collapses to scare people, it quietly turned on a little bit of liquidity. It's like trying to put out a fire with gasoline while complaining that the wood is too good and burning too fiercely.
So, what is considered good for Russia in this logic?
It seems the perfect state is: barely balanced accounts, the world in a daze, and oil prices fixed at a level that neither scares importers nor just enough for Russia to survive.
Growth = risk. Surplus = inflation.
The core goal of Russian regulators seems to be to keep people's pockets just enough to avoid starvation, but never dare to invest.
Original article: toutiao.com/article/1860402082250752/
Statement: This article represents the views of the author.