The Bank of Russia Board of Directors today decided to maintain the key rate at 11.0% per annum, referring to “higher inflation risks amid persistent risks of considerable economy cooling”.
The announcement accompanying the decision says the depreciated ruble (RUB) will continue to put pressure on prices in the next few months. However, the relatively rigid monetary conditions and subdued domestic demand are set to drag down annual inflation. The annual consumer price growth rate in September 2016 is estimated to be about 7%, reaching 4% in 2017.
The Bank of Russia will subsequently revise its key rate, depending on the balance between inflation risks and the risks of economy cooling.
The Forex world has been monitoring closely the monetary policy decisions of Russia’s “Megaregulator”, especially after the Bank of Russia’s snap decision last December to sharply hike the key interest rates to 17%. The move then led to withdrawal of liquidity for RUB instruments, which prompted many Forex brokers to suspend offering of trading with Ruble pairs.
The Bank of Russia has cut the key interest rates several times since that moment – on January 30th, March 13th, April 30th, June 16th and July 31st this year.
Te next rate-setting meeting of the Bank of Russia Board of Directors is scheduled for October 30, 2015.
To view the official announcement on the latest key rates decision, click here.