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Minister: Decision on rate not to lead to significant market fluctuations

June 16, 2016, 20:33 UTC+3 ST. PETERSBURG

The Russian economic development minister comments on the decision of the US Federal Reserve System

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ST. PETERSBURG, June 16. /TASS/. The decision of the US Federal Reserve System will not lead to significant markets’ fluctuations, Economic Development Minister Alexei Ulyukayev told journalists on Thursday on the sidelines of the St. Petersburg International Economic Forum (SPIEF 2016).

"Expectations for the Fed’s accuracy exist on the market. I think it will not lead to some significant fluctuations in the stock and foreign exchange markets," he said.

The US Federal Reserve System acting as the national central bank keeps the base interest rate at 0.25-0.5%. The Federal Reserve increased the base interest rate by 0.25 percentage points to 0.25-0.5% in December 2015. The rate was within the range of 0-0.25% from December 2008 to December 2015.

According to the forecast of the Russian Central Bank, the US Federal Reserve System will gradually raise interest rates, one-two increases might be held in 2016. Head of the Central Bank Elvira Nabiullina said last week, increase of the rate could have a negative impact on commodity quotes.

GDP contraction 

The ministry expects GDP contraction of less than 1% in 5 months of 2016 in annual terms, Ulyukayev added.

"We have no exact figures yet. We expect GDP contraction of less than 1% in 5 months (of 2016) year-on-year," he said.

According to the Ministry’s monitoring for January-April period of 2016, Russia’s GDP contracted by 0.7% in April year-on-year while in the first four months of this year GDP contracted by 1.1% year-on-year.

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