Regulatory Announcements

The Bank of Russia cuts the key rate by 25 bp to 7.25% per annum

On 26 July 2019, the Bank of Russia Board of Directors decided to cut the key rate by 25 bp to 7.25% per annum. Inflation slowdown is continuing. At the same time, inflation expectations remain elevated. Russian economy’s growth rate is coming in lower than the Bank of Russia’s expectations. Weak economic activity, along with temporary factors, limits inflation risks over the short-term horizon. According to the Bank of Russia’s forecast, taking into account the pursued monetary policy, annual inflation will return to 4% in early 2020.

If the situation develops in line with the baseline forecast, the Bank of Russia admits the possibility of further key rate reduction at one of the upcoming Board of Directors’ meetings and a transition to neutral monetary policy in the first half of 2020. In its key rate decision-making, the Bank of Russia will take into account actual and expected inflation dynamics relative to the target and economic developments over the forecast horizon, as well as risks posed by domestic and external conditions and the reaction of financial markets.