CBR Keeps Key Rate At 7.75% A Year

25 March 2019 (09:24)

UrBC, Moscow, March 25, 2019. The Central Bank of Russia decided to keep the key rate at 7.75% a year, the bank’s latest press release states.

The Board of Directors’ meeting took place on March 22, 2019.

‘In February—March 2019, inflation is holding somewhat lower than the Bank of Russia’s expectations. Despite the fact that inflation expectations of households and businesses notably declined in February and March, they remain elevated. The contribution of the VAT increase to annual consumer price growth has largely materialised. However, deferred effects may manifest themselves in the months to come. Short-term pro-inflationary risks have abated. In view of the above, the Bank of Russia has lowered its end-of-year annual inflation forecast in 2019 from 5.0-5.5% to 4.7-5.2% and expects inflation to return to 4% in the first half of 2020,’ the press release says.

‘In its key rate decision-making, the Bank of Russia will take into account inflation and economic dynamics against the forecast, as well as risks posed by external conditions and the reaction of financial markets. If the situation develops in line with the baseline forecast, the Bank of Russia admits the possibility of turning to cutting the key rate in 2019,’ the CBR states.

The next time the BOD is going to consider adjusting the key rate will be at the meeting on April 26, 2019.

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