UrBC, Yekaterinburg, April 27, 2020. Russia’s Central Bank sums up the incoming macroeconomic data as plenty of disinflationary factors and zero factors contributing to devaluation that results in inflation. The CBR also believes that people’s increased inflation expectations are only temporary, Vice Chair of the Board at NEYVA Bank Igor Koshmin claimed after the CBR decided to bring the key rate down to 5.5% p.a. on Friday.

‘The drop in the key rate also supports economic growth and makes it less costly for the Finance Ministry to borrow funds on internal markets. Given the growing need for public debt options, the CBR’s decision will help cut down on the budget spending. The possible side effect is that more pressure will get exerted on the ruble, as the interest rates offered on the ruble and the basic global currencies will be less dramatically different. However, this particular factor will only have a limited impact on the situation,’ NEYVA Bank’s press service quotes Koshmin as saying.