Russia Monetary Policy


Bank Rossii maintains rates

At its 13 December meeting, Bank Rossii left the one-week repo rate unchanged at 5.50% as market analysts had expected.

The decision came amid a broadly-unchanged outlook for the country's economy. According to the Central Bank, recent indicators suggest that economic growth remains low. The Bank believes that it will remain low in the medium term due to subdued investment and sluggish external demand. Regarding price developments, Bank Rossii acknowledged the pick-up in inflation in November and the first half of December, which came on the back of an increase in prices for fruits and vegetables. Data released after the monetary policy decision showed that inflation ended 2013 above the Bank's 5.0%-6.0% target range. That said, the Central Bank sees inflation resuming its downward trend in the first half of 2014 and achieving the target rate (5.0%) in the second half of the year.

The Central Bank concluded its statement by noting that, "the downward trend in inflation expectations needs to be formed to ensure a way of achieving an inflation target in the medium term." This suggests that, despite sluggish economic growth, monetary authorities are still concerned about the need to anchor inflation expectations before launching an easing cycle, despite sluggish economic growth.

Against this backdrop, FocusEconomics Consensus Forecast panelists expect the refinancing rate to close 2014 at 4.96%. For 2015, the panel expects the rate to end the year at 4.91%.

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Russia Monetary Policy Chart

Russia Monetary Policy December 2013

Note: Refinancing rate in %.
Source: Central Bank of the Russian Federation (CBR).

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