After a rate-setting meeting today, the Bank of Russia Board of Directors has decided to keep the key interest rate unchanged at 11.0% per annum, referring once again to substantial inflation risks.
In its announcement, the Russian “Megaregulator” said the balance between inflation risks and the risks of economy cooling has broadly remained the same since its last meeting.
Inflation expectations, though having decreased as compared with September, remain elevated. The moderately tight monetary policy and the weak domestic demand driven by the low growth of the nominal income of the population, help limit the growth of consumer prices.
The Bank of Russia forecasts the annual consumer price growth to be under 7% in October 2016, on track to reach the 4% target in 2017, facilitated by the current monetary policy. As inflation slows down in line with the forecast, the Bank of Russia Board of Directors will continue with a downward revision of its key rate, at one of its forthcoming meetings.
The Bank of Russia will hold its next rate review meeting on December 11, 2015.
Last year’s December saw the Central Bank made a critical decision regarding the key rates – they were hiked to 17% back then, leading to a deficiency of Ruble liquidity.
The Bank of Russia has reduced the key interest rates several times since that moment – on January 30th, March 13th, April 30th, June 16th and July 31st this year. At its meeting on September 11, 2015, the “Megaregulator” left the key interest rates unchanged at 11%.
To view the official announcement from the Bank of Russia, click here.