Russia Monetary Policy


Russia: Bank Rossii leaves rates unchanged

October 14, 2013

At its 14 October meeting, Bank Rossii left the one-week repo rate unchanged at 5.50%, a move expected by market analysts. The decision came amid a pessimistic outlook for the Russian economy.

According to the Central Bank, recent indicators suggest a continued slowdown in economic growth. The Bank believes that economic growth will remain low in the medium term, due to subdued investment and sluggish external demand. Regarding price developments, Bank Rossii acknowledged that inflation decreased considerably in recent months, hitting the upper end of the 5.0%-6.0% target range at the beginning of October. According to the Central Bank, inflation will moderate further and remain within the target rage until the end of 2013. Moreover, the Bank expects inflation to drop further in 2014.

While this opens up the possibility for interest rate cuts in the coming months, monetary authorities remain worried over anchoring inflation expectations. According to the Central Bank, "more pronounced downward trends in inflation expectations need to be formed to ensure the achievement of inflation goals in the medium term."

Against this backdrop, FocusEconomics Consensus Forecast panelists 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%.

Author:, Head of Data Solutions

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Russia Monetary Policy Chart

Russia Monetary Policy October 2013

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

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