Bank Rossii

December 24, 2011

The Russian refinancing rate was cut to 8.0% from 8.25% on Friday.  2011 had begun with the central bank in tightening mode when 25-bp  increases in the benchmark interest rate were implemented in both February and April.  As summer began, the expressed bias was still restrictive, but priorities had switched during the summer.  Nonetheless, the timing of this month’s cut caught analysts by surprise CPI inflation of 6.4% still exceeds 6%.  Concerns about global economic uncertainty due to debt problems have changed the direction of greatest risk.  Russian civil unrest ahead of next year’s presidential elections may have been a background factor.

Copyright 2011, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.


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