Bank Rossii: Mixed Message after Policy Meeting

June 15, 2012

Russia’s refinancing rate had been cut in December from 8.25% to 8.0% in a directional reversal following 50 basis points of tightening this year.  After the latest policy meeting, there still have been no refinancing rate changes in 2013.  However, a surprise was sprung when the rate on FX swaps was cut to 6.5% from 8.0%.  Officials have identified upside inflation risks over the second half of 2012 from planned administered price increases and fading food price disinflation.  Today’s action indicates concern about the effects of the euro debt crisis.  Lower oil prices will dampen Russian growth, too.

Copyright 2012, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.



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