To make loans more accessible for small and medium-sized businesses. Underdeveloped competition and banking systems hit small and medium-sized businesses. QUESTION from Bloomberg: Two questions, if I may. Question one. The Bank of Russia had several options before this 13 / 14  BIS central bankers' speeches  meeting: to maintain the key rate, to cut it by 25 bp or to cut it by 50 bp. How unanimous was the decision to reduce the rate by 25 bp? Did anybody want to keep the rate unchanged? And, question two. As long as non-monetary policy-related questions have already been asked, may I also have one? According to Novaya Gazeta, roughly $ billion was withdrawn from Russia in 2011–2014 under the so-called Moldova scheme, whereby money was withdrawn under court rulings. The Moldavian party claims that Russia did not assist but in fact impeded the investigation. Was the Bank of Russia aware of this, and were you monitoring it somehow or countering cash withdrawals in any way? Thank you. ELVIRA NABIULLINA: Thank you very much. Indeed, we discussed different options about whether to keep the key rate or reduce it, we analysed the pace of reduction, all the economic data and our forecast. The final decision to cut the rate by 0.25 pp was unanimous. As far as the Moldova scheme is concerned, it was one of the first dubious transactions we countered. We almost eliminated it and revoked licences from banks actively involved in the Moldova scheme.
This is necessitated by the still high sensitivity of inflation to oneoff factors, as well as its inertia and elevated inflation expectations. As they stabilise close to the target level of inflation, prices are expected to be less responsive to various short-term factors. These new conditions would see no need for additional tightening in the monetary policy stance to ensure that inflation holds near 4%. This conservative strategy in monetary policy may appear unattractive short-term; however it will enable us to deliver on a more sustainable result in the mid-term, that is, deliver on the objective to establish in Russia a low price and cost growth environment – such that favours both households and businesses, as well as the overall economy. Q&A for the Media QUESTION from Vedomosti: Given the Bank of Russia’s move to reduce the rate and its guidance that further rate reduction is not impossible in the second and third quarter, does that suggest that the Bank of Russia has launched a monetary loosening cycle? ELVIRA NABIULLINA: An easing cycle is understood as a process of sequential rate reduction, decided at each policy Board meeting. Having said that, we acknowledge that the sequence of rate cuts may be interrupted, though this would not run counter to an overall mid-term downward movement of the rate. We will move forward with care and precision. For the most part we will be largely guided by economic data as well as, certainly, by our forecasts.