MOSCOW, January 23. /TASS/. It is too early to talk about returning to a neutral monetary policy, Bank of Russia Deputy Governor Alexey Zabotkin said on the regulator’s official Telegram channel.
"Inflation remains above the target, not to mention inflation expectations, which have not declined significantly. Therefore, it is too early to say that it is already time to return to a neutral monetary policy," he noted.
At the same time, Zabotkin added that the key interest rate has been cut from 21% to 16%, and the Central Bank’s forecast envisages further reductions over the course of 2026. He also emphasized that the Bank of Russia estimates the long-term nominal neutral rate in the range of 7.5-8.5%.
Zabotkin also noted that a policy aimed at maintaining low inflation also contributes to stabilizing the national currency’s exchange rate. "A policy focused on low inflation simultaneously works to stabilize the exchange rate. External shocks may cause volatility, but with low inflation there cannot be a continuous, self-sustaining quarter-to-quarter devaluation," Zabotkin noted.
He also recalled that two years ago the regulator assessed whether the 4% inflation target was optimal from various perspectives. "The conclusion (the materials are posted on the website in the section on the Monetary Policy Review) was that by the end of 2021 there were already conditions for a lower target. We will return to the issue of lowering the inflation target after inflation stabilizes at the current 4% level," he emphasized.