Russia Monetary Policy


Russia: Central Bank leaves refinancing rate unchanged, narrows money market corridor

January 10, 2013

At its latest policy meeting on 10 December, the Central Bank left the refinancing rate unchanged at 8.25%, in a move expected by market analysts. Simultaneously, the Central Bank raised the overnight deposit rate by 0.25 percentage points to 4.50%, while leaving the overnight repurchase rate at 6.50%. With this move, the Central Bank narrowed the policy rate corridor, which it uses to influence rates in the interbank overnight lending market. According to monetary authorities, the move is neutral in terms of their monetary policy stance, but it will help reducing money market rates volatility and contribute to strengthen the monetary policy transmission mechanism

The decision to leave the main rate unchanged comes amid a positive inflation outlook. While inflation ended 2012 above the Central Bank's 5.0%-6.0% target range, monetary authorities reiterated 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".

The Central Bank sees the current monetary policy stance as appropriate for the near future. According to analysts, the Bank will likely remain on hold in the coming months, as an inflation scenario under control takes pressure off the Bank to raise interest rates, while allowing monetary authorities to focus on faltering economic growth.

Author:, Head of Data Solutions

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Russia Monetary Policy Chart

Russia Monetary Policy December 2012

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

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