Regulatory Announcements

The Bank of Russia Cuts the Key Rate by 50 bp to 5.50% p.a

On 24 April 2020, the Bank of Russia Board of Directors decided to cut the key rate by 50 bp to 5.50% per annum. Since the March Board of Directors meeting, the situation has changed dramatically. Significant restrictive measures have been introduced to combat the coronavirus pandemic both in Russia and across the world, which negatively influences economic activity. This creates material and prolonged disinflationary influence on price dynamics from the aggregate demand perspective, which offsets the effect of temporary pro-inflationary factors, including those related to the fall in oil prices. At the same time the situation in global financial markets has stabilised after a period of particularly high volatility in March. The Bank of Russia has reviewed its baseline forecast scenario and is shifting to accommodative monetary policy. According to the Bank of Russia’s forecast, given the monetary policy stance, annual inflation will reach 3.8-4.8% in 2020 and will stabilise around 4% later on.