Middle East situation fraught with rising costs in the global economy that could also affect Russia - Central Bank Governor Nabiullina

MOSCOW. March 20 (Interfax) - The situation in the Middle East could lead to higher costs in the global economy in the long term, which could also affect the Russian market, Central Bank of Russia Governor Elvira Nabiullina said at a press conference.

"The situation in the Middle East is significantly affecting global commodity markets. The final impact on the Russian economy should depend on the duration and scale of these geopolitical events. On the one hand, in the short term, the main channel of influence on the Russian economy is higher prices for oil and a number of other Russian exports. This should support export revenues and the ruble," Nabiullina said.

"However, when we talk about longer-term effects, the situation in the Middle East could adversely affect the prospects for growth in global demand and investment, lead to higher inflation in energy-importing countries, and disrupt supply chains. Essentially, this is another supply shock that should impact global costs and, to a certain extent, be passed on to prices on the Russian market," Nabiullina added.

Nabiullina said that logistics problems could have an adverse effects on Russian export volumes. However, it is too early to estimate the cumulative effects of external events on the Russian economy.