Russia cuts key rate by 50 bps to 9¼% as inflation moves toward 4%

By Susanna Moon

Chicago, April 28 – The Bank of Russia’s board of directors decided to reduce its key interest rate by 50 basis points to 9¼% on Friday.

Inflation is in line to reach the 4% inflation target by year-end, with inflation expectations dropping and economic activity recovering; however, inflation risks linger, according to a bank statement.

With the moderately tight monetary policy, the bank said it expects inflation to hold close to the target in 2018 to 2019.

Annual consumer price growth fell to 4.3% from 4.6% in February, with annual inflation at 4.2% to 4.3%.

Meanwhile, the economy continued to recover in the first quarter and fixed capital investments are expected to expand, the bank noted.

“Given the current recovery dynamics and the economy’s growing resilience to the fluctuations in the external economic climate, the Bank of Russia expects that the GDP will grow in 2017-2019 even if the conservative oil price scenario materializes,” the release said.

© 2015 Prospect News.
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