Central Banks

Central banks must retain independence, Russia's top banker says

Key Points
  • Central bank Governor Elvira Nabiullina told CNBC Friday that her profession must retain independence in the face of criticism.
  • U.S. Fed Chair Jerome Powell has previously been pressured by President Donald Trump to remove a previous hawkish outlook.
  • Russia's central bank held its key interest rate at 7.75% on Friday, in line with market expectations.
Central banks don't conduct 'populist monetary policy,' Russia's Nabiullina says

The head of Russia's central bank said fellow organizations like the Federal Reserve and the European Central Bank (ECB) must maintain independence in the face of criticism.

Responding to a question over political pressure placed on Fed Chair Jerome Powell by President Donald Trump, Elvira Nabiullina told CNBC's Geoff Cutmore that central banks are not there to conduct "populist monetary policy."

The central bank governor added that criticism of central banks by lawmakers reflected "their own goals" and was not restricted to the United States.

"I think the criticism of central banks is quite widespread. We should be prepared for this and to keep our professional judgement and independence," she said in Moscow on Friday.

'Don't see global recession'

The Fed has recently become less bullish in its outlook for the U.S. economy, having gone from a relatively hawkish stance to what potentially could be an end to the hiking cycle. In Europe, investors now await details of a fresh ECB package designed to increase lending at the region's banks.

Those actions suggest a gloomy environment is coming for the global economy and Nabiullina said central bankers had responded correctly.

"I think this change in monetary policy stance is mostly a response to the data. Especially to the data on global economic dynamics and forecasts. The global economic dynamic is facing a lot of unpredictability."

Despite the uncertainty, the Russian central bank governor retained her view that global growth would continue.

"Some slowdown can happen, but we don't see global recession," she said.

No global recession coming, Russian central bank says

Second cut this year?

Russia's central bank held its key interest rate at 7.75% on Friday, in line with market expectations. The Russian rouble slipped marginally lower.

Inflation, which is the main metric that the central bank keeps an eye on, has been slightly lower than expected, hitting 5.3% last month.

The bank has stayed firm on rates after twice raising rates in 2018 and has indicated it could cut rate again by June this year.

Nabiullina told CNBC she could "say nothing" about a second rate cut this year, adding that it would depend on the economy and inflation expectations.

Russian central bank chief: Inflation still remains elevated