Regulatory Announcements

The Bank of Russia Cuts the Key Rate by 50 bp to 6.50% p.a.

On 25 October 2019, the Bank of Russia Board of Directors decided to cut the key rate by 50 bp to 6.50% per annum. Inflation slowdown is overshooting the forecast. Inflation expectations continue to decrease. The Russian economy’s growth rate still remains subdued. Risks of a substantial global economic slowdown persist. Disinflationary risks exceed pro-inflationary risks over the short-term horizon. In these circumstances, the Bank of Russia has lowered its annual inflation forecast for 2019 from 4.0–4.5% to 3.2–3.7%. Given the monetary policy stance, annual inflation will come in at 3.5–4.0% in 2020 and will remain close to 4% further on.

If the situation develops in line with the baseline forecast, the Bank of Russia will consider the necessity of further key rate reduction at one of the upcoming Board of Directors’ meetings. 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.