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Elvira Nabiullina: the rate can be reduced only in 2017

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Elvira Nabiullina: the rate can be reduced only in 2017

Elvira Nabiullina: the rate can be reduced only in 2017
September 23
10:30 2016

In an interview with CNBC Elvira Nabiullina, Russian Central Bank Governor, said again that the policy of the bank was thought to be left moderately hard in order to get warranty that the inflation data would amount to 4 percent by the end of 2017.

In particular Nabiullina said: “The trajectory of the key rate lowering will be aimed at achieving our inflation target.”

According to the analysts’ forecasts, last Friday the Central Bank of the Russian Federation lowered the key rate by 50 basis points to 10.00 per cent per annum. Also, the Bank of Russia made a statement that it was necessary to maintain the achieved level before the end of that year with the probability of the rate cut in the I and II quarter next year.

Nabiullina said that the fact of  high rates maintenance by the Central Bank would not slow down the economic growth, which was restricted by structural limitations.

Nabiullina reported that it was very unlikely that the rate would be cut that year.

“But, of course, if any extraordinary events occur, for example, if there is a much higher oil price or other circumstances … which will lead to the fact that the overall economic dynamics and inflation dynamics will be better than those written down in our basic scenario, of course, this can happen “, – added the governor of the Central Bank of the Russian Federation. She also noted that the regulator did not believe that these events would occur with the high probability.

According to Nabiullina, inflationary expectations still remain above the level corresponding to the inflation targets of the CB, although they are slowly declining.

“This is largely explained by the psychological factor because people in Russia are used to living in conditions of high inflation. Nowadays people do not think that inflation can be stable and low within 4 percent, “- said Nabiullina.

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