The Bank of Russia cuts the key rate by 25 basis points to 7.25%, noting continued inflation slowdown, Reuters reported citing a press release from the regulator.
“Inflation slowdown is continuing. At the same time, inflation expectations remain elevated. Russian economy’s growth rate is coming in lower than the Bank of Russia’s expectations,” the Central Bank says.
Russia’s annual inflation, taking into account monetary policy, will return to 4% in early 2020, the press release continues. “Taking into account the pursued monetary policy, annual inflation will return to 4% in early 2020,” the Central Bank predicts.
“Annual consumer price growth rate declined to 4.7% in June (from 5.1% in May 2019) and was close to 4.6% according to the estimates as of July 22. June results show that annual core inflation declined for the first time since March 2018 and reached 4.6%,” the regulator commented.
Poor economic activity along with temporary factors limits inflation risks over the short term horizon, the Bank of Russia notes.
The central bank will hold the next rate review meeting of the Board of Directors on September 6 of this year.
