According to Gref, the Central Bank should continue cutting its key interest rate because using monetary policy to address non-macroeconomic drivers of inflation is ineffective. (By “non-macroeconomic factors,” Gref was referring to Ukrainian missile and drone strikes on Russian infrastructure.)
“My view is that an economy cannot function for long under today's extremely high real interest rates. Real rates are around 10% — that is, the Central Bank's key rate minus current inflation. A 10% real rate may be appropriate in the short term to cool the economy. But what we are seeing today, in my opinion, is clear evidence that the economy has already been overcooled. The rate needs to be reduced,” Gref said at Sberbank's annual shareholders' meeting.
He said Russia is currently facing numerous challenges, including problems in the energy sector, which he described as non-macroeconomic factors contributing to higher prices.
“In my view, it is completely irrational to use monetary policy to fight one-off factors that arise outside the normal market environment,” Gref said.
He argued that the current policy is placing a “very significant” drag on the economy.
“We are seeing investment fall by more than 14%. Raising or maintaining high interest rates is a countercyclical policy. In the current situation, we need a pro-growth approach. The economy needs support in coping with these challenges. The rate should be lowered,” Gref said.
“The interest rate is the key that unlocks business investment,” he added.
According to the Sberbank CEO, investment in Russia could decline by 2% to 3% in 2026.
Earlier in June, the Bank of Russia's board of directors cut the key interest rate by 25 basis points to 14.25% annually.
Central Bank Governor Elvira Nabiullina also said inflation expectations could rise because of higher fuel prices following Ukrainian strikes on Russian oil refineries.