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Russian central bank criticizes government price control attempts

2021-04-07T12:07:58.591Z


The boss of the Russian Central Bank criticized Wednesday the government measures to control food prices, wanted by Vladimir Putin, in the face of high inflation on certain products. See also: Russia: inflation stabilizes in March, at 5.8% over one year " The administrative price cap should be abandoned as soon as possible, because it distorts the price indicators in the economy and discourages


The boss of the Russian Central Bank criticized Wednesday the government measures to control food prices, wanted by Vladimir Putin, in the face of high inflation on certain products.

See also: Russia: inflation stabilizes in March, at 5.8% over one year

"

The administrative price cap should be abandoned as soon as possible, because it distorts the price indicators in the economy and discourages the development of production,

" said Elvira Nabioullina, one of the few voices punctually criticizing government economic policies.

We must "

be very careful not to get carried away by these mechanisms,

" she said, speaking during a discussion broadcast on YouTube by the Moscow Stock Exchange.

Exploding staple food prices

Consumer prices have started to climb in Russia since March 2020 amid the oil crisis, the fall of the ruble and the global economic slowdown due to the Covid-19 pandemic.

This inflation was notably driven by an explosion in the prices of staple foods - primarily sugar and vegetable oil - which prompted the authorities to introduce measures such as export quotas.

Agreements on the stabilization of sugar prices run until June 1, 2021, and until October 1, 2021 for sunflower oil, Vladimir Putin declaring that there was "

nothing wrong

" that the producers reduce their profits.

But voices have been raised to protest the measures, such as the boss of the Lenta supermarket chain, Vladimir Sorokin, who told the RBK newspaper that they could ruin the biggest retailers with already very low margins.

Global prices of basic foodstuffs have been breaking records for several months, due to rising commodity prices triggered by hopes of an economic recovery as well as unfavorable weather and supply chains weakened by the pandemic.

Read also: Vladimir Putin will be able to remain President of Russia until 2036

In Russia, this development has been accompanied by a decline in purchasing power for years and the increase in prices brings back painful memories to Russians, marked by inflation out of control and empty supermarkets after the collapse of the Soviet Union in the 1990s.

Source: lefigaro

All business articles on 2021-04-07

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