MOSCOW, October 29. /TASS/. The Bank of Russia expects the budget for the next year will slow down inflation and the floor will be opened to reduce the key rate, Central Bank chief Elvira Nabiullina said at the Federation Council, the upper house of the Russian legislative assembly.
"The deficit-free budget, it is needed not only and not so much for the Central Bank to reduce the rate. It is actually required for the balance of public finance, required not to have excessive government debt accumulated, which would make the financial system more vulnerable," she said. An important but indirect consequence is that "the smaller is the budget deficit, the higher is the opportunity to reduce the rate with all else being equal," Nabiullina noted.
The proposal of the government reflects an absolutely responsible approach towards stability of the budgetary policy, the Central Bank chief said. "We expect the budget of 2026 will help to slow down inflation and this will open more space for further key rate reduction," she added.