Structural Reforms Should Not Sacrifice Economic Stability – Russian Central Bank

ST. PETERSBURG, May 23 (RIA Novosti) – The implementation of structural reforms in Russia should not sacrifice macroeconomic stability and low inflation in the country, Russian Central Bank Governor Elvira Nabiullina said Friday.

“In my view, the implementation of structural reforms should not in any way be tied to sacrificing macroeconomic stability,” Nabiullina said at the St. Petersburg International Economic Forum.

“Macroeconomic stability, low level inflation, low budget deficit, and the level of state debt: these are the values that have been reached over the last few years and we should absolutely save them while holding these reforms,” she added.

One of the proposed economic reforms is a law on the creation of a national card payment system, signed by Russian President Vladimir Putin earlier this month. The law tightens requirements for payment system operators with clearing and settlement centers outside Russia.

Specifically, it obliges foreign payment systems starting July 1 to make quarterly contributions to a special account in the Central Bank in the amount of 25 percent of the average daily turnover. In addition, penalties will be imposed on operators of payment systems for unilateral termination of customer service.

Visa and MasterCard first said they were considering leaving the Russian market due to the restrictions, but after a meeting with Russian Finance Ministry officials earlier Friday said they are ready to stay and cooperate with local payment systems.

The reform came in the wake of growing hostility from the West over Moscow’s stand on the Ukrainian crisis. Visa and MasterCard denied service to several Russian banks in March as a result of US sanctions amid the escalating conflict in Ukraine, raising concerns about the security of the country’s financial system.

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