(Reuters] – Elvira Nabiullina, the Governor of Russia’s Central Bank, spoke at a news conference on Friday after her central bank reduced its key rate to 9.5%.

Nabiullina spoke Russian. The below quotes have been translated by Reuters to English.

SOVEREIGN BANK DEBT

As a general rule, inability to repay sovereign debt results in an outflow from investors and a decline in state assets’ value. This has happened in Russia. There are no immediate implications (during default declaration) This does not affect the state’s ability to meet its obligations toward OFZ-purchased residents.

OIL EMBARGO

It will be determined if and how much it is feasible to redirect flow to other markets. It will secondarily depend on what the price factor is, which, in turn, will affect the global economy’s growth and overall situation.

INFLATION

“The inflation expectations (of businesses) of the people and the public are much higher than they were with an inflation rate close to 4%.”

We expect that the price slowdown will not stop, “

The very low price increases in the last week cannot be attributed to persistently low inflation. In large measure, it can be explained with price corrections after the sharp rise in March. The pro-inflationary risk remains strong.”

If companies have to export goods to Russia, a decrease in Russian imports could lead to disinflationary consequences.”

STAGFLATION RISKS

They are not included in the baseline forecast. Our policy is to ensure that this risk doesn’t materialize.”

SANCTIONS

“The possibility of secondary sanctions continues.”

Foreign currency transactions are subject to restrictions and sanctions. The banks are seeking to decrease the number of foreign currency transactions. They may also stop selling certain products that have foreign currencies. However, it’s important to respect the rights and interests of all bank customers.

CONSUMER ACTIVITY

“We believe an improvement in economic prospects, indexation pensions, can contribute to an increase of consumer activity.”

FISCAL REGULATION

“The next budget is being discussed. It is important that we return to the past to one or more budget rules and that we understand the budget framework, as this will affect monetary policy.

KEY RATE

The situation is unpredictable, and many things are rapidly changing. “It is difficult to predict our key rate” move at all times.