elvira nabiullina : review of recent inflation developments in russia and economic outlook statement by ms elvira nabiullina, governor of the bank of russia, in the follow - up to the board of directors meeting, moscow, 13 december 2019. * * * today, the board of directors has decided to cut the key rate by 25 bp down to 6. 25 % per annum. we will consider the necessity of further key rate reduction in the first half of 2020. let me dwell on the main factors behind the decision. first. annual inflation continues to decline faster than we expected. our revised inflation forecast for the end of this year is 2. 9 – 3. 2 %. meanwhile, average 2019 inflation will stand at 4. 5 %, which reflects the high price growth rate in late 2018 and the first months of 2019. this significant slowdown in inflation in the second half of the year was caused by a joint action of a number of disinflationary factors, both temporary and more persistent. these factors include an increased supply of individual food products due to a bumper harvest. also, price growth of imported goods is still limited due to the ruble appreciation and inflation deceleration amongst russia ’ s trading partners. at the same time, moderate demand, both external and internal, is a more persistent factor. the proportion of temporary and persistent factors has yet to be estimated. most indicators that we analyse reflect low inflationary pressure. annual core inflation is declining at the same rate as the headline consumer price index. both indicators were registered at 3. 5 % in november. seasonally adjusted monthly price growth has been around 0. 2 % since june. for food products, this indicator came in even lower in october and november. if we transform these monthly indicators into annualised form, the result will be lower than 4 %. however, looking at the key product groups, while annual food and non - food price growth keeps falling, services prices increased slightly faster in november with their growth rate reaching 3. 9 %. this was mainly owing to the market services segment, which could be an early sign of a potential revival of demand. survey results also indicate an improvement in consumer sentiment. as to the next year, our inflation forecast for the first quarter is below 3 %. this decrease will be temporary. it is in line with our expectations and is explained by the fact that the effect of the vat rate increase will be factored out from the calculation of annual

. last year, we revealed 168 ponzi schemes, which is 25 % more than the year before. we are working together with law enforcement agencies, including regional authorities. it is law enforcement agencies that bear responsibility for putting an end to the activity of such illegal entities. illegal lenders pose the greatest threat to the public. under the guise of microfinance organisations ( that is why microfinance organisations often face criticism ), they offer loans which are sometimes secured against housing, and afterwards demand that borrowers repay enormous amounts of money. illegal lenders usually operate via the internet and we must stop their activity. therefore, we ask you to authorise the central bank to promptly block websites advertising illegal financial operations, among other things. we have already forwarded the respective bill to the state duma and look forward to your support. in order to reduce the chances of the public getting trapped by illegal lenders, since last year, we have been working together with yandex on a joint project aimed at labelling websites of legal trustworthy microfinance organisations registered with the central bank with special symbols. we are discussing similar projects with other search engines. development of the mir card currently, as many as 59 million cards have been issued ; the share of the mir card has been growing both in issue volumes and cashless operations. countrywide, people use cards on a daily basis ; in more than half of russian regions, transport cards, and in some regions, also 4 / 7 bis central bankers'speeches social cards are attached to the mir card. we hope this trend will continue. mir cards are accepted in member states of the eurasian economic union and turkey ( last year we told you we were conducting negotiations ). in the near future, we are planning to ensure that these cards are accepted in non - cis countries popular with russian tourists, and to expand their acceptance in cis countries. the development of cashless payments is not restricted to the use of mir cards. last year, we completed the development of the bank of russia ’ s special project, faster payments system ( fps ), which we launched early this year. as many as 14 banks have already joined the system, and 114 more have applied. our estimates suggest that early next year, 250 banks will have joined the system. at the later stages, only small banks with a basic licence, which need more time to introduce changes, will join. according to our estimates, the introduction of the faster payments system will reduce fees