Lenta.ru, translated by Tom Winter -
The Bank of Russia has lowered the prime rate to 9.25 percent.
The Board of Directors of the Central Bank has decided to reduce the prime rate by 0.5 percentage points to 9.25 percent per annum. The relevant information is contained in the message of the regulator.
The Central Bank observes that the inflation rate is closing in on the target level of four percent and that expectations of inflation are waning. The decision of the board of directors was also affected by the restoration of economic activity.
"Under the conditions of moderately tight monetary policy, the target inflation rate of 4 percent will be achieved by the end of 2017 and will be maintained near this level in 2018-2019," the Central Bank said.
The regulator points out that in future the decision on the rate will be influenced by the
- ratio of the probabilities of the implementation of the baseline scenario (the decline in oil prices to $ 40 per barrel),
- the scenario with the growth of oil quotations,
- the further dynamics of inflation, and
- economic development relative to the forecast.
The Central Bank also notes that in the near future the main risk of inflation may be the volatility of the global commodity and financial markets. It can rise against the backdrop of talks on limiting oil production by the exporting countries.
The next meeting of the Board of Directors of the Bank of Russia, dedicated to the prime rate, should be held on June 16.
On March 24, the Central Bank lowered the key rate by 0.25 percentage points to 9.75 percent per annum.
The prime rate is the main instrument of the monetary policy of the Central Bank. Under it, the regulator issues loans to banks. The indicator affects the formation of interest rates on loans in credit institutions, as well as on the level of inflation and exchange rates.
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