Current interest rate levels support steady disinflation, no risk of credit contraction - Central Bank of Russia

MOSCOW. May 20 (Interfax) - Current interest rate levels support a steady decline in inflation, and there is no risk of credit contraction, Director of the Central Bank of Russia's Financial Stability Department Elizaveta Danilova said.

"In recent months, in March and April, we have seen fairly steady growth in [corporate] lending. Along with bonds, which banks are also actively investing in - corporate ones - we are seeing overall monthly growth of around 1%. Of course, this can in no way be called credit contraction. Therefore, in our view, the situation is manageable. And we currently have a real level of rates that is necessary precisely for sustainable disinflation," Danilova said at the annual banking forum organized by Expert RA.

"We expect to achieve our inflation target without adverse consequences for the economy. That is, we expect to have a soft landing without credit contraction," she said.

The Central Bank previously said that corporate lending growth in April, according to preliminary data, was comparable to March levels (up 0.9% in March). Retail loan portfolio dynamics in April again showed near-zero movement.