Russia Monetary Policy


Central Bank adopts less hawkish tone

At its latest policy meeting on 9 November, the Central Bank left the refinancing rate unchanged at 8.25%, in a move expected by market analysts. Simultaneously, the Central Bank left the overnight deposit rate unchanged at 4.25% and the overnight repurchase rate at 5.50%. The decision came amid a moderation in inflation, which eased in October after having reached a ten-month high in September. Although inflation still remains above the Central Bank's 5.0%-6.0% target range for this year, monetary authorities believe that a moderation in food prices and the effect of the interest rate hike implemented in September will contribute to a moderation in inflation expectations, as "demand-pull price pressures are absent". In the concluding statement, the Central Bank maintained that it will continue to monitor inflationary risks and gauge the impact of earlier monetary tightening on the slowing economy. According to analysts, the phrasing suggests a shift towards a less hawkish tone. Monetary authorities will likely remain on hold in the coming months, in the absence of surprises in data that could affect the inflation and growth scenario.

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Russia Monetary Policy Chart

Russia Monetary Policy November 2012

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

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