Russia is still operating under U.S. (and international) sanctions for its meddling in the U.S. election.
Kostin was added to a U.S. list of sanctioned individuals in April 2018 as he was deemed to be close to Putin and designated as a government official given the bank's state-owned status.Nonetheless, Russia embarked on a program of import substitution and has weathered a storm of dramatically low oil prices, which coincided with the imposition of sanctions, leading to a financial crisis in Russia with the ruble tumbling and inflation rocketing.
Russia's central bank has tamed high inflation in the last few years with a policy of high interest rates but has since then been gradually lowering the rate as inflation has decreased. In October, the central bank again cut its main interest rate by a surprising 50 basis points to 6.5% and signaled that it could cut the rate again in the coming months because of slowing inflation .
"What we lack today is fast economic growth, the forecast is 1.3% only in comparison with last year when it was 2.3%," he said. "Of course, Russia is an open economy and what's happening in the world and the slower economic growth in China, in the world, in Europe, is affecting the Russian economy. But we also have our domestic problems, the lack of investments and lower domestic demand."
As the world's second largest natural gas producer, and third largest oil producer in the world, Russia has been able to lean on its energy exports as sanctions have curtailed other parts of its economy. Oil prices have also risen since late 2016 in no small part due to Russia's pact with OPEC to curb oil output in order to balance supply and demand.
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