7 September, the Chairman of the Central Bank Elvira Nabiullina said that the Board of Directors on 15 September to discuss the reduction of the key rate by 0.25 or 0.5 percentage point from the current level of 9%. The head of the Central Bank for the second time precedes the decision on the rate cards of the regulator. And rightly so: we are not talking about someone who “beat”, and the predictability of monetary policy, in the interests of all parties. But still- it would cut the rate?
Usually, the Central Bank chooses conservative decisions. But this time it seems that of the two options mentioned by the Chairman of the Central Bank, more chances of relatively more radical. And, of course, not because the care goes out of fashion.
Will take the liberty to say that even a reduction in the rate of growth of prices in this case is not a decisive argument. Yes, on the website of the Central Bank is that in August the annual rate decreased to 3.3%, under the previous “goals” in the already famous 4%. But it’s surprisingly powerful price tide (deflation, or falling prices).
Understand that for many of us “falling prices” sounds a bit weird. But first, some types of fruit and seasonal vegetables are really cheaper. Second, Rosstat monitors prices from your list is very peculiar: first of all, on nebrendirovannoj goods — this is the root of differences between the official and private inflation. Most importantly — the surprising power of the tide. Similarly, more recently, the unexpected, the Central Bank has been a surge in prices in early summer. And it follows that the Central Bank will overestimate the August successes in the war on prices, and deflation come and go. And quite probably, the returning wave of inflation will again be surprisingly high.
Of course, the level of inflation in any case remains a major target for the Central Bank, which shamed his detractors unprecedented victories over prices and expectations of growth that it is going to burn with a hot iron, but the August reinforcements, seasonal, and, therefore, not the decisive outcome of the campaign nature.
But there is another factor that the Central Bank is independent and that if was mentioned in the duty statement following the meeting of the Board of Directors September 15, casual. I’m talking about the policy of the Federal reserve. Officially, the Bank of Russia claim that the fed’s policy on the situation on the Russian money market has no effect. But it’s not.
Today, the main news from overseas that the rise rate slows down. The main reasons are political. We are talking about what Donald trump was never able to get congressional approval for the realization of its pre-election fiscal policy. As a result, inflation came out at target for the fed boundaries and the dollar was overvalued.
What does this mean for the ruble? If the expectations of deceleration of a rate hike by the fed is justified, it is a clear signal to investors: do not hurry with investments in the dollar. In other words, they will behave as they say on the market in “risk-on”. And this wave of willingness to invest in riskier compared to us securities, despite all the sanctions will affect the Russian market. Again the convergence rates of the fed and the Central Bank is slowing down — hence, the incentives for investments in high-yield Russian securities are maintained. The ruble will remain supported by these investments. The falling dollar to the same — growth factor in the price of oil, which feels quite good.
As a result of the Central Bank a free hand to the maximum possible reduction in its key rate without the fear that the ruble react lower, in turn pushing up prices. Well, in the end, is it bad when the name of the famous film by Federico Fellini is a sign of the Bank rate of Russia?
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