Russia Monetary Policy


Russia: Central Bank highlights inflation risks, hints at wait-and-see approach

February 12, 2013

At its latest policy meeting on 12 February, 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 4.50% and the overnight repurchase rate at 6.50%. However, the Central Bank decided to merge at 4.25% the reserve requirement on liability to residents (previously: 4.00%) and non-residents (previously: 5.50%).

In the accompanying statement, monetary authorities expressed concerns regarding price developments. According to Central Bank estimates, inflation is expected to remain above the Bank's 5.0%-6.0% target range during the first half of 2013. A prolonged period of time with inflation above the target is seen as an upward risk to inflation, as it may prompt agents to revise their inflation expectations upwards.

Regarding the economic outlook, the Central Bank sees output close to its potential level and does not see tight monetary conditions as a downward risk for growth. According to analysts, the Central Bank statement suggests that monetary authorities will remain on hold in the coming months.

Author:, Head of Data Solutions

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Russia Monetary Policy Chart

Russia Monetary Policy February 2013

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

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