Another Russian Central Bank Interest Rate Cut

April 28, 2017

The Bank of Russia’s 50-basis point key interest rate cut to 9.25% decided today is larger than analysts were expected. Officials justified the decision by noting that inflation fell sharply last quarter to 4.3% (not far above the 4.0% target). Expected inflation is also lower, growth is positive, and real interest rates remain positive even after today’s move. Forward guidance hasn’t changed, meaning that more rate cuts in 2017 are plausible even though inflation in the short run could edge higher. The Board of Directors will next meet on June 16.

Copyright 2017, Larry Greenberg. All rights reserved. No secondary distribution without express permission. 



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