The CBR said in the future will be to reduce the key rate

the Bank of Russia assumes that the future will reduce the key rate “more gradually”. About it in interview Reuters was declared by the Deputy Chairman of the Central Bank of the Russian Federation Alexey Zabotkin.

According to him, “press release of June (the regulator at the end of June meeting — ed.) contains a signal indicating that the Board continues to see room to cut rates.”

the Chairman of the Central Bank indicated that “the wording (the signal to the market — ed.) was adjusted in comparison with the April meeting in order to reflect the fact that the further rate of decline is likely to be more gradual, due to the fact that a substantial portion of the space to mitigate was.”

Zabotkin also pointed out that “the Bank of Russia will determine the level of the key rate, which will keep inflation close to 4% in the medium term”.

Recall that on 23 June the Chairman of the Central Bank doubted that the regulator will go to the lowering of the key rate to zero. “We have not a zero rate. And, I think, in the foreseeable future, we to zero key rate will not come”, — said Zabotkin.

At the meeting in June, the Board of Directors of the Central Bank of the Russian Federation lowered the value of the key rate from 100 basis points (1 percentage point) to 4.5% per annum. Thus, the rate is lowered the third time this year and to a new historic low.

the Key rate of the Bank of Russia — the main tool of monetary policy of the regulator. The rate at which the Central Bank provides money to commercial banks. She serves as a signal of financial organizations, which focus on key rate, by providing loans and attracting deposits.

As stated the Central Bank in its press release that “the disinflationary factors are stronger than previously expected, due to the greater duration of restrictive measures in Russia and in the world.” “The impact of short-term proinflationary factors largely exhausted. Financial stability risks related to the situation in global financial markets decreased. Inflation expectations of population and business has decreased. In these circumstances there is a risk of significant deviation in inflation from 4% in 2021. The decision on the key rate is aimed at limiting this risk and keep inflation near 4%,” — said the controller.

“With the development of the situation in the baseline forecast, the Bank of Russia will assess the feasibility of further lowering the key rate at the next meeting”, — stated in the message.

the Next meeting of the Board of Directors of the Central Bank, which will address the issue of the level of the key rate, scheduled for July 24, 2020.

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