Russian Monetary Policy Statement

January 15, 2013

A statement released after this month’s interest rate policy meeting at Bank Rossii deleted the following sentence that had been inserted in the December 2012 statement: “Considering recent domestic and international macroeconomic developments the Bank of Russia judges that the current level of money market interest rates is appropriate for the near future.”  This deletion could give officials the flexibility to reduce the 8.25% refinancing rate or make some less significant easing gesture as soon as the next meeting, which will occur in the first half of February.  The refinancing rate has alternated between 8% and 8.25% since a 25-basis point hike to 8.0% in February 2011.  Such was raised by another 25 bps in April 2011, cut by 25 bps in December 2011 and raised back to 8.25% in September 2012.  There have been no subsequent changes.  Analysts were not expecting a change today.  Russian monetary officials must balance the economy’s slower economic growth against higher-than-desired inflation.  The 12-month rise of consumer prices has accelerated to 6.8% most recently from 6.5% in October and November. 

Copyright 2013, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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