Russia Monetary Policy


Bank Rossii stays put

At its 9 August policy meeting, the Central Bank left the refinancing rate unchanged at 8.25%, a move expected by market analysts. The decision comes amid a more pessimistic outlook regarding the Russian economy.

Economic indicators point to a moderation in economic growth. Monetary authorities acknowledged downside risks to the growth outlook, amidst weak investment activity and subdued external demand. In addition, the Bank stressed that these risks will continue for the medium-term. Regarding price developments, Bank Rossii maintains its assessment that inflation will move back within its 5.0% to 6.0% target range in the second half of 2013. That said, the Bank stressed that, "favorable trends in the dynamics of inflation expectations should be sustainable," in order to achieve the medium-term inflation target. According to analysts, the statement's phrasing suggests that Bank Rossii may refrain from easing its monetary policy stance for longer than previously expected in order to anchor inflation expectations, particularly for next year.

Against this backdrop, FocusEconomics Consensus Forecast panellists expect the refinancing rate to close the year at 7.77%. For 2014, the panel expects the rate to end the year at 7.46%.

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Russia Monetary Policy Chart

Russia Monetary Policy August 2013

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

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