policy, significantly cut the key rate, and act countercyclically. however, what is the reason behind our concerns about the rise in inflation expectations? there is a risk that they may again stay elevated for a certain time, thus impeding a steady anchoring of inflation close to 4 % and affecting the flexibility of monetary policy further on. monetary conditions continue to adjust to the earlier significant key rate reduction. interest rates in the credit market are going down, with lending amounts having considerably expanded. owing to financial stability in the banking sector, the key rate decrease has quickly and successfully translated into the easing of monetary conditions and supported the economy, 1 / 3 bis central bankers'speeches despite higher credit risks. unlike the previous crisis periods, this year we have managed to prevent a contraction in lending. in addition to the key rate cuts, lending is also promoted by the regulatory easing and other measures implemented by the bank of russia. the preferential programmes launched by the government are another important contributor to the easing of monetary conditions. in particular, preferential lending accounts for nearly one - fourth of new loans granted in recent months to small and medium - sized enterprises and about one - half of new mortgage loans. nonetheless, the anti - crisis support measures implemented by the government and the bank of russia will be gradually terminated. we also take into account that it is essential to maintain accommodative monetary conditions next year in order to stabilise inflation close to 4 % over the forecast horizon. when making our decisions on the key rate, we also estimate how saving behaviour is adjusting to lower interest rates in the financial market. we are aware that in this case financial institutions, companies and households need time to adjust to the new conditions. this is especially relevant since the pandemic, declining incomes and higher uncertainty may dramatically alter consumption and saving models. seeking higher returns, individuals are increasing demand for various instruments in the financial market. for instance, we can already observe an increase in bond investments and an overall surge in households ’ activity in the stock market. this trend in itself has no significant impact on the efficiency of monetary policy because the transmission mechanism is equally functioning through the securities market as well. we believe it essential that these changes in saving models do not entail any significant rise in risks for households, businesses and financial institutions. hence, pursuing our monetary policy, we factor in that this adjustment will be taking time. as regards the economy, after the easing of the quarantine restrictions, economic activity

has been reviving, although unevenly across different industries and regions. a number of industries are managing to decrease the gap with pre - pandemic output levels faster than other sectors. this is evidenced by official statistics, our up - to - date results of financial flows monitoring and companies ’ surveys held by the bank of russia ’ s regional branches. those industries that are primarily focused on consumer demand are bouncing back more quickly. their recovery is being driven by both pent - up demand for goods that were unavailable over the quarantine period and the growth of expenses in the domestic market during the holiday period when possibilities to travel abroad are limited. nonetheless, this is primarily related to goods. the service sector is still far from having fully recovered, being affected by postquarantine restrictions and consumers ’ cautiousness. as regards the production of intermediate and export goods and their transportation, these industries are recovering more slowly. weak external demand is a significant constraint on economic growth. moreover, the momentum for the recovery in the global economy may be waning now. as a result of this heterogeneity, there may be significant differences in price dynamics in different industries and regions, both now and in future. this trend is clearly demonstrated by data on consumer inflation in summer. the return to potential in different product markets may occur at a different pace. for instance, in industries focused on domestic demand, this may be a faster process than in export industries ; the recovery of the consumer - facing sector may be quicker than in the production of investment goods. therefore, it is essential to consider not only the general output gap in the economy, that is, the deviation of output from its potential, but also the situation 2 / 3 bis central bankers'speeches in individual sectors. if output in industries focused on domestic demand returns to its potential faster than generally across the economy, this will amplify overall inflationary pressure. we take this into account when analysing the economic situation and making key rate decisions. at present, the effects of deferred domestic demand have been considerably implemented and the overall recovery of the russian economy is likely to continue at a more moderate pace. this year, both fiscal and monetary policies are contributing to the economic recovery. at the same time, while anti - crisis budget measures were particularly important during the period of restrictions and will be curtailed in future, accommodative monetary policy will continue to operate next year to support the russian economy. i would also like to