Bank of Russia head Elvira Nabiullina announced a low probability of a key rate cut at upcoming meetings of the regulator’s board of directors. The decision to recently increase the rate to 12% was taken to level out price stability risks and bring inflation to 4% by 2024, the head of the Central Bank said.
It is unlikely that the Central Bank will reduce the official interest rate in the next meetings. This was reported to RBC by the director of the Bank of Russia, Elvira Nabiullina.
On August 15, the Bank of Russia raised the official interest rate from 8.5% to 12%. The decision was made against the background of the sharpest fall in the ruble – the exchange rate of the Russian currency fell to 100 rubles to the US dollar and 110 to the euro.
“Now the decision was made precisely on the basis of the increased risks of price stability to ensure that inflation returns to the 4% target by 2024,” Nabiullina said.
After the meeting of the Board of Directors of the Bank of Russia, at which it was decided to increase the key interest rate, Alfa-Bank analysts stated that they doubted the effectiveness of this measure.
With the current inflation dynamics, the decision to increase the interest rate is unfounded and the very fact of the increase will have no effect on the currency market, analysts say.
Author:
Kirill Bilyk
Source: RB
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