Russian economy overcooled, key rate needs to be lowered - Sberbank head

MOSCOW. June 30 (Interfax) - The Russian economy is already overcooled, it is necessary to lower the key rate, and it is irrational to try to influence non-macroeconomic factors of inflation through monetary policy measures, the chairman of Sberbank's board of directors Herman Gref said.

"My point of view is that the economy cannot exist for long at extremely high rates, real high rates that exist today. And our real rates are around 10%; that is, the Central Bank of Russia's policy rate minus current inflation. And 10% is a rate that can be applied in the short term in order to cool the economy. What we see today, in my opinion, is quite obvious - we have already overcooled the economy. And the rate needs to be lowered," Gref said at the annual meeting of Sberbank's shareholders.

A large number of difficulties are currently arising, including problems with the energy sector, which are non-macroeconomic factors affecting price increases, he said. "And to fight against one-time factors that arise outside the market context using monetary policy measures is completely irrational, in my opinion," Gref said. In his opinion, this creates a very large depressive burden on the economy. "We see a drop in investment of more than 14%. And raising or maintaining a high rate is a counter-cyclical policy. In this case, it is necessary to pursue pro-cyclical policy. We need to help the economy cope with such a situation. We need to lower the rate," Gref said.

"The rate is the key in the lock of corporate investment activity," he said.

Investment could decrease 2%-3% in 2026, he said.