MOSCOW, Sept 12 (Reuters) - Russian Central Bank Governor Elvira Nabiullina and her deputy Alexei Zabotkin addressed a news conference on Friday after the central bank cut its key rate to 17% from 18%.

They spoke in Russian and the quotes below were translated into English by Reuters.

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*NABIULLINA ON PAYMENT SYSTEMS BETWEEN RUSSIA AND CHINA

We do not comment on the details of cooperation in the field of international settlements. In general, I can say that despite external restrictions, our banks and companies are developing various alternative payment methods. Therefore, international settlements do not currently have any impact on stability and monetary policy.

*NABIULLINA ON ECONOMIC GROWTH

According to our estimates, the economy will continue to grow this year and next, albeit at a slower pace than in the previous two years. There can be no other outcome after the overheating, but it is still growth. Moreover, the more severe the overheating, the more noticeable the economic slowdown will be.

When will growth accelerate again? In our view, when potential catches up with demand, when we finally emerge from overheating, and both demand and supply grow at a steady pace. For inflation, this will mean a steady return to 4%, and for interest rates, a return to neutral territory. We currently estimate this neutral territory to be 7.5%-8.5%.

However, the reasons for the acceleration in growth are not the reduction in interest rates themselves, but the fact that the reduction in interest rates will mean that the economy is returning to a balanced state, with demand no longer outstripping production capacity. In the baseline forecast, this will happen by the beginning of 2027.

If we try to accelerate growth now, before demand has caught up with the supply of goods, services, and production, inflation will accelerate and ultimately undermine sustainable growth. Therefore, we are determined to bring inflation down to sustainably low levels.

NABIULLINA ON OPTIONS FOR KEY RATE DECISION

Two options were considered at the meeting: lowering the rate by 1% and keeping the rate unchanged. The arguments in favour of keeping the rate unchanged were that monetary conditions had eased significantly and that we needed to assess the consequences of the decisions already taken. And, of course, we will need to obtain more information about what the budget policy will ultimately be.

NABIULLINA ON THE BUDGET FACTOR

Our decision today reflects our understanding, based on the information currently available, of how the budget will shape up at the end of 2025 and its parameters for 2026, 2027 and 2028. We assume that the budget will be disinflationary for the year, but the extent of this will be clarified when amendments to this year's budget are made. We expect the government to present specific quantitative characteristics by the end of September, and we will include them in our forecast update at the October meeting.

And, of course, the budget factor is always important, as is the predictability of budget policy in general.

NABIULLINA ON THE EXCHANGE RATE

"We always take into account exchange rate dynamics. This is an important indicator of the degree of monetary policy tightness and the main indicator through which changes in external conditions affect inflation. With a monetary policy aimed at low inflation, a stable, self-sustaining weakening of the exchange rate is impossible.

But fluctuations do occur. They are inevitable when economic conditions change. And, of course, we analyse all these factors when making decisions."

https://www.reuters.com/business/finance/russias-nabiullina-rates-economy-budget-2025-09-12/