His support for the monetary policy adopted by the Bank of Russia to curb inflation was expressed today by the President of the country, Vladimir Putin, noting that otherwise Russia would be in danger of being in the same situation as Turkey.
“I know there is dissatisfaction with interest rate hikes,” Putin told a news conference at the end of each year. “But if they had not been implemented, we could have ended up with the same problem as Turkey,” he was quoted as saying by Bloomberg.
Inflation in Russia is estimated at 8.4%, more than double the target set by the central bank, which raised its key interest rate by 4.25 points during 2021 to contain rising prices. In contrast, Turkey’s central bank has cut its key interest rate four times in recent months, despite annual inflation climbing to 21.3% in November.
Turkish President Recep Tayyip Erdogan is a fan of unorthodox monetary policy, which wants high interest rates to inflate rather than limit inflation, contrary to the views of the vast majority of economists and central bankers.
For this reason, Erdogan has pressured the central bank to cut interest rates, despite the fact that the cost of living for Turkish households has skyrocketed, the exchange rate of the pound has plummeted and companies importing goods and raw materials from abroad find it difficult to cover costs in dollars.
Earlier in the week, in a bid to stem the growing dollarization of savings, Erdogan announced plans to compensate depositors for the pound, offering them the difference if the currency depreciates more than their bank rate. As many analysts have pointed out, this plan effectively transfers the cost of monetary policy to the state budget – that is, to taxpayers.
Erdogan’s move has not particularly convinced international markets. It is indicative that the cost of insuring Turkish public debt is more than five times that of Russia and equal to the cost of insuring Iraq’s debt.
Putin: “Europe has created its own problems with gas and it must solve them”
Vladimir Putin said it was “unfair” to blame Moscow for the spike in gas prices in Europe, as “Gazprom is fulfilling all its obligations” to supply gas.
Gazprom had to meet its obligations under long-term contracts before supplying gas to the spot market, and countries with long-term contracts – such as Germany – now have gas at much lower prices and can even resell gas to their neighboring countries at a profit, Putin said during the annual press conference.
Europe has created its own problems with gas and it must solve them, he said, adding that he suspects that some Russian gas was eventually resold to Ukraine.
Putin: “US response to Moscow proposals is positive”
Russian President Vladimir Putin says Washington’s response to Moscow’s security proposals, which include Russia’s demand from NATO and the United States to end its military support for Ukraine, is “positive” and that Russia wants to avoid a war with Ukraine and the West.
“At the moment we are seeing a positive reaction, our American partners have told us that they are ready to start this discussion, these negotiations, from the beginning of the year in Geneva,” Vladimir Putin said during the annual press conference. that the future enlargement of the Atlantic Alliance is “unacceptable” to Russia.
Russia has denied US allegations that it is preparing to invade Ukraine next month and has called for Western guarantees, including a promise that there will be no NATO military activity in Eastern Europe and that NATO missiles could be deployed on Ukrainian soil.
Westerners have blamed Moscow for attacking Kiev as the Russian military rallied thousands of troops along the border with Ukraine, part of which has already been annexed by Moscow.
Moscow, which says it wants to defend its security against the “challenges” of Kiev and the West, presented two draft treaties last week, one to the US and the other to NATO, outlining its demands. for de-escalation.
These plans prohibit NATO enlargement, mainly to Ukraine, and limit Western military cooperation in Eastern Europe and the former Soviet Union, but do not impose similar measures on Russia.
“The ball is in their court. “They have to answer us,” Putin said, adding that representatives for the Geneva talks in early 2022 had already been appointed. “I hope the situation will develop in this direction,” he said.
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