No Change in Russia’s 7.75% Refinancing Rate
September 29, 2010
The Bank of Russia left its benchmark rate unchanged in spite of an acceleration of inflation to a 12-month pace of 6.7% in September from 6.1% in August, further ruble depreciation and some evidence of a rise in inflation expectations. The bank’s decision was anticipated by analysts. Policy continues to be oriented toward the promotion of economic growth. From a high of 13.0% from December 2008 until April 2009, the key interest rates was lowered 14 times, the last cut being made at the end of this past May to 7.75% from 8.0%. In Pakistan, floods have lifted food costs (see prior update in this section); a drought in Russia has had the same directional impact on that country’s food price index and overall inflation. Russian GDP was 4.5% higher at mid-year than mid-2009, but officials find the state of domestic demand hesitant and are concerned about enhanced global uncertainties.
Copyright Larry Greenberg 2010. All rights reserved. No secondary distribution without express permission.
Tags: Russia
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