Russia: CBR keeps policy rate unchanged at 7.75%, hints at possible rate cut in Q2/Q3

Eren Sengezer FXStreet

The Central Bank of the Russian Federation (CBR) has recently announced that it kept its policy rate unchanged at 7.75% in a widely expected decision. Below are some key takeaways, via Reuters, from the CBR's monetary policy statement.

If the situation develops in line with the baseline forecast, the Bank of Russia admits the possibility of turning to cutting the key rate in Q2-Q3 2019.
Annual inflation passed the local peak in March and started to subside in April. Consumer prices current growth rates track somewhat below the Bank of Russia forecast.
In April, inflation expectations of households rose slightly after a tangible drop in March.
Annual inflation will return to 4% in the first half of 2020.
Consumer prices current growth rates tend to be somewhat below the Bank of Russia’s forecast.
VAT increase pass-through to prices has largely materialised.
Consumer demand trends constrain inflation.
Temporary disinflationary factors contributed to slowing consumer price growth, among those ruble appreciation since the beginning of the year.
Monetary conditions have seen no significant changes since the last board meeting.

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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