Volatility in other markets also increased dramatically. At that moment, the Central Bank’s main task was precisely to maintain financial stability and contain both devaluation and inflation expectations. The Bank of Russia then discontinued to reduce the key rate and made the decision to carry out proactive foreign currency sales within the fiscal rule. We believe that foreign currency sales linked to the oil price in the market were a key element that helped stabilise the foreign exchange market. At that period, there were concerns that the oil price might stay even below 25 US dollars per barrel for a long time. This algorithm made it possible to temper volatility using the resources from Russia’s foreign currency and gold reserves to a very moderate extent. This was crucial during that period since nobody was able to predict then how the pandemic situation would develop, how long-lasting and deep the crisis would be, and how high the risks to financial stability might be. In such an environment, it is essential to use the available safety cushion thoughtfully to be able to give an adequate response to challenges if they persist. 1/6  BIS central bankers' speeches  The introduction of large-scale restrictions worldwide caused a deep decline in both domestic and external demand. In order to promote economic recovery, we shifted towards accommodative monetary policy as soon as the risks to financial stability abated. We resumed the cycle of the reduction in the key rate as early as April.
Third, it is necessary to implement the legislative program, which is not a matter of readiness with draft legal acts, but rather a matter of parliamentary procedures for discussion and adoption of the prepared legal acts. Next, in fourth place, are the tasks related to technical and logistical preparation. The banking sector has made relatively good progress and continues to work actively and systematically on this issue. The fifth group of tasks is related to the communication campaign, which must be launched without further delay and which will be an important factor in reaching both the messages and the answer to the specific questions to businesses and people. The success of the overall euro accession process will depend crucially on our ability to achieve political, institutional and fiscal consolidation. Thank you for your attention! 5/5  BIS - Central bankers' speeches