Russia Walks Tightrope to Curtail Credit Risk and Avoid Downturn

Governor Elvira Nabiullina’s aggressive fight against inflation has left the Bank of Russia walking a tightrope between avoiding recession today and preventing stress in the banking sector from snowballing into a crisis tomorrow.

To cushion the economy from high interest rates, the central bank is encouraging lenders to restructure loans and keep companies afloat for now. That opens the door for riskier credit to build up and turn into losses later.