St Petersburg International Economic Forum

Russia's central bank: No need for special measures

The governor of Russia's central bank has declared the country's economy doesn't need further "special measures" in spite of signs of slowdown.

Elvira Nabiullina, Governor, Central Bank of the Russian Federation, speaking at the St. Petersburg Economic Forum (SPEIF), also implied that the country does not need international help.

"The monetary policy instruments which Russia has at its disposal are pretty well developed," Nabiullina said.

Sergei Karpukhin | AFP | Getty Images

She pledged to bring inflation, which stood at 7.3 percent in April, to 6 percent by the end of the year.

The central bank has recently had to intervene to make the rouble less volatile, after the value of the currency fell against the dollar due to the crisis in Ukraine and slowing growth in Russia. It has also hiked interest rates to 7.5 percent, from 5.5 percent before the crisis began at the end of February.

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Nabiullina, a former minister and adviser to President Vladimir Putin, has been central bank governor since last June.

Economists have slashed their forecasts for Russian growth this year, and the economy is expected to experience a mild recession in the first half of 2014, as sanctions imposed as a result of the Ukraine crisis,and international and domestic nervousness, affect the economy.

Russia's Finance Minister Anton Siluanov has ruled out any stimulus to its economy, which has substantial "rainy day" funds,but is facing increasing concerns that it has not diversified enough from oil and gas revenues.

There has also been substantial capital flight out of the country, which Nabuillina explained as mainly caused by investors swapping their roubles for dollars.

"The problem is not movement of capital, the problem is about the fact people don't feel comfortable investing capital in this country," Irackly Mtibelishvily, chairman of banking, Citi Russia & CIS, told the audience.

The issue of how to reassure foreign investors about putting their money in Russia, after the Ukrainian crisis, has been top of the agenda at the forum.

"We are interested in foreign direct investment, but we want to develop domestic investment first," according to the central bank governor.