Bank of Russia Retains 7.25% Main Interest Rate

June 15, 2018

Russian monetary easing is on pause. The rate had been last cut by 25 basis points in both February and March and before that by a full percentage point during March-June of 2017 and 125 basis points during the final quarter of last year. But after leaving the one-week repo rate at 7.25% following this month’s review, a statement was released that projects a rise of CPI inflation from around mid-2% of late to 3.5-4.0% by end-2018, then 4.0-4.5% in 2019 and 4% late in 2020. Inflation risk relative to this baseline view is moreover tilted to the upside, and the reason for this is a planned increase in value added tax in 2019.

Copyright 2018, Larry Greenberg. All rights reserved. No secondary distribution without express permission.



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