The Bank of Russia has held a planned meeting and decided to cut the key rate to 6% per annum, i.e. by 25 basis points. As a result of the meeting, they have issued a press release to let the public know about the regulator’s further plans. If events develop according to the basic forecast, the Central Bank of the Russian Federation will cut the rate at the next meetings.
We recall that in the next 6 months, there will be three meetings of the Central Bank. The basic key rate is most likely to be cut during the meetings.
The decision of the Central Bank of the Russian Federation has coincided with the experts’ expectations, who predicted a rate cut by 25 points. Only the coronavirus epidemic and its economic consequences could prevent the easing of monetary policy.
Also, from the press release the public has found out the inflation indicator for January. So, it is equal to 2.7%, which is 0.4% lower than in December.
The press release also reflects the fact that the growth rate of the Russian economy accelerated in the second half of last year. In addition, the regulator has noted that the risks of a serious slowdown in the global economy have not disappeared. The Central Bank believes that annual inflation in 2020 will amount to 3.5-4.0%.
Last year, the Russian regulator cut the base key rate five times: four times by 25 basis points, one by 50 points.
The easing of monetary policy has caused a fall in the national currency against the US dollar and euro.
The material was prepared with the participation of Katya Wilson,
a leading analyst of the brokerage company UFT Group