The Bank of Russia has decided to lower the key rate. Now its size is 8.5%. The Central Bank also has published inflationary expectations (the inflation rate is currently 4%). The favorable economic dynamism is noted.
It became known that GDP growth was expected to reach 2.2% for the current year. Older reports of the Central Bank predicted the GDP growth of no more than 1.8%.
The previous value of the key interest rate was equal to 9%. The Central Bank’s press release says that the GDP growth for the second quarter of this year has exceeded the expectations of experts. The economic growth was facilitated by the investors’ interest, consumer demand growth, an increase in the construction activity as well as recovery in the manufacturing industry. Extraction and trade of minerals are noted as one of the positive factors.
The goal of the Bank of Russia is to keep the inflation at 4%. So, it is necessary to keep a sufficiently tight monetary policy.
Elvira Nabiullina, Chairman of the Central Bank of the Russian Federation, said that the Department was seriously considering the prospect of further lowering the key rate. The decision will be made after analyzing the behavior of consumer prices and the economic activity. In addition, the inflation level will be monitored.
Positive news from the Russian Federation should help strengthen the national currency. We are waiting for the reaction of foreign exchange markets.
The material was prepared with the participation of Andrey Majorov,
a leading analyst of the brokerage company CT Trade