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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.