The CEO of VTB Bank, Andrey Kostin, spoke in depth about currency policy, interest rates, and the evolving stance of global financiers during a recent interview with RBC. In the lead-up to the Eastern Economic Forum, Kostin acknowledged that the Bank of Russia has not ruled out further adjustments to the key rate, signaling openness to policy recalibration as market conditions shift. He noted that central bankers have already voiced their perspectives on this potential path, underscoring a dynamic dialogue between monetary authorities and the banking sector. Kostin’s remarks reflect a broader debate about how quickly policy should respond to inflation pressures, growth prospects, and external risks, a discussion that resonates across Russia’s financial landscape and beyond (RBC interview, Kostin, 2024).
On the policy front, Kostin highlighted a persistent tension between bankers and regulators. He described bankers as generally more aggressive and willing to embrace higher risk when opportunities appear, while regulators tend to emphasize stability and measured risk. This contrast, Kostin suggested, shapes how financial policy is discussed and implemented, influencing decisions about fiscal rules, deficits, and debt management. He touched on the possibility of employing a budget rule designed to keep the deficit in check, and he explored scenarios involving a debt level reaching around 40% of GDP, a level that would require careful balancing of growth, credit conditions, and public investment. Kostin’s perspective reflects an ongoing debate about how fiscal frameworks should adapt to a changing economic environment while preserving financial credibility (Kostin, RBC interview, 2024).
In terms of cross-border transactions, Kostin noted that trade in yuan is already active, with direct currency conversion between rupees and rubles increasingly commonplace. He acknowledged that brokers from India and the United Arab Emirates offer commissions and discounts, yet the overall trading volumes in these channels continue to expand. Kostin argued for advancing settlements in national currencies as a strategic priority, a move that could reduce reliance on a single dominant reserve currency and promote greater financial sovereignty among trading partners (Kostin, RBC interview, 2024).
Regarding sanctions and the broader financial landscape, Kostin warned of the potential for a full financial blockade if conditions align with an Iran-style scenario, where both financial and manufacturing sectors could become collateral damage in a sanctions regime. He stressed, however, that such a scenario has not materialized at present, and he observed that the European Union has shown signs of easing toward new punitive measures while continuing trade relationships with Russia. These comments illustrate the fragility of global supply chains and the importance of diversification, resilience, and measured policy responses in times of geopolitical strain (Kostin, RBC interview, 2024).
A note on administrative structures in the Russian Federation: the system establishing a uniform personal income tax rate for remote workers has been a feature of the tax landscape, reflecting ongoing fiscal strategies designed to adapt to changing work patterns and economic activity. This development sits within a broader framework of tax policy aimed at improving compliance, simplifying administration, and supporting regional economic dynamics without sacrificing revenue stability (Ruble tax framework, 2023-2024).