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Bank of Russia sees potential for further key rate cuts

March 23, 16:08 UTC+3

The Bank of Russia sees growing risks for the country related to the situation on global markets

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© Anton Novoderezhkin/TASS

MOSCOW, March 23. /TASS/.The Bank of Russia sees room for further reduction of the key rate, Central Bank chief Elvira Nabiullina said at a press conference on Friday.

"We still have to grope for the key rate level, so that it would be possible to say that we completed its reduction cycle… We see there is still a potential for the key rate reduction," she said.

"The key level rate is gradually approaching the range we have designated as a neutral one. The one, where the monetary policy does not contribute to either reduction or acceleration of inflation above the target level," Nabiullina noted.

The Central Bank expects to complete the transition to the neutral policy this year, she added.

Global markets 

The Bank of Russia sees growing risks for the country related to the situation on global markets, Nabiullina has warned. 

"Risks have also increased related to the situation on global markets. Normalization of the monetary policy in the United States and the Eurozone may occur quicker than market participants expect in the environment of high economic growth rates and low unemployment. The review of market expectation may be accompanied by volatility bursts, as in this February. Furthermore, policy normalization may lead to revision of urgency and risks premiums and the potential upward revaluation of neutral positive rates overseas. This may reduce attractiveness of investments into emerging economies, including Russia," the banker said.

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