“The Bank of Russia kept its key rate at 7.25%

The ruble neutrally responded to the decision of the regulator, saving rate was expected by the market

Photo: TASS, and Alexander Shcherbak

– The Board of Directors of the Bank of Russia on 27 April 2018 has decided to maintain the key rate at 7.25% per annum, according to the regulator.

CB noted the persistence of inflation at a low level. The regulator also said that a factor in more rapid approximation of the growth rate of consumer prices to 4% will be the weakening of the ruble in April against the background of geopolitical tensions. This factor, however, in the opinion of the Central Bank, does not create a risk of exceeding the inflation target.

“However, uncertainty remains regarding the impact of the events on inflation expectations,” – said in a press release.

The Bank of Russia has kept the inflation forecast for the end of 2018 at the level of 3-4%. Expects it will be close to 4% in 2019.

The rate of growth of GDP in 2018, the regulator expects in the range of 1.5-2%, which corresponds to a potential growth rate of the economy.

Central Bank still expects to move to a neutral monetary policy (DCT) in 2018. “The Bank of Russia believes that the potential of reducing the key rate for the formation of neutral monetary conditions has decreased, given the rise in interest rates in developed markets and increased country risk premiums for Russia”, – draws the attention of the regulator.

According to experts of “Interfax-CEA”, the Russian ruble neutrally reacted to the decision of the Bank of Russia to maintain the key rate at 7.25% per annum, as the decision was widely expected by the market.

Fluctuations in the U.S. dollar after the announcement of the decision of the Central Bank of the Russian Federation at a rate remained in the range 62,66-62,70 rubles/$1, while the Euro continued to fluctuate in the corridor 75,71-75,77 rubles/EUR1, like to 13:30 GMT.

The next meeting of the Board of Directors of the Bank of Russia for monetary policy to be held June 15, 2018. It will be a support that is will be accompanied by a press conference of the Chairman of the Central Bank and the publication of the report on the OST.

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