The Central Bank of Russia lowered its leading interest rate by 0.5 percentage points to 9.25%. The bank notes that inflation is close to the target of 4% and the expectations for its decline remain unchanged, as well as for the recovery of economic activity. At the same time, inflationary risks have not gone completely, the bank said.
“The Board of Directors of Central Bank of Russia has decided to lower the leading rate to 9.25% on an annual basis”, says the regulator’s communique.
According to the central bank, a moderately tightened monetary policy is needed to maintain the propensity to save and the trend towards sustainable inflation under the influence of demand constraints. At the same time, the press release underlines that the regulator’s assessment of the possible general fall in the basic interest rate by the end of 2017 has not changed.
The Central Bank of Russia predicts an increase in gross domestic product (GDP) for 2017-2019, even in the context of the conservative scenario for oil price developments, is complemented by the regulator’s communique published today after the board of directors today.
“Given the current dynamics of recovery processes and increasing the economy’s resilience to fluctuations in the external economic environment, Central Bank of Russia expects GDP growth in 2017-2019 even under the conservative scenario of oil price developments”, the bank says.