Russia’s High Real Rates Worth It for Fitch in Credibility Boost

The toll on Russia’s economy leveled by high real interest rates is worth paying because of the boost to central bank credibility, according to Fitch Ratings.

“It’s a short-term cost, but once you have central bank credibility, that’s clearly a long-term benefit for the economy,” Paul Gamble, a senior director at Fitch, said in an interview in Moscow on Wednesday. “High real rates would have a potentially negative impact on growth. For us, the more important thing is establishing the credibility of the inflation-targeting regime and any impact on growth would be more than offset by enhancing central bank credibility.”