The head of the Central Bank of Russia Elvira Nabiullina admits that trade wars risk developing into currency in case of unfavorable development of the situation in the world economy. She expressed this opinion during her speech in the State Duma.
“The massive inflow of capital, which was observed in the past years in the world, when developed countries conducted an unprecedented soft policy, can be replaced by a period of equally entertaining and prolonged outflow of capital,” the head of the regulator said, noting that the developing markets, including Russia, will suffer in the first place.
Nabiullina accuses of the risks to the Russian and other economies of the US and China, which unleashed a trade war in 2018: “the Introduction of mutual protectionist barriers between the major economies — all this negatively affects global trade and creates threats to sustainable global growth.”
Trade confrontation, according to Nabiullina, can collapse the stock markets; harm the global economy, slowing its growth, as well as lead to a new round of confrontation, which will result in currency wars.
The consequences of trade confrontations and policies on the world stock markets have been felt in recent weeks — world oil prices fell by almost $ 10, which caused serious concerns among traders who are afraid of a repeat of the situation in 2014 when oil prices fell twice in a couple of months.