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Russia’s Central Bank cuts key rate to 7.5%

The Bank of Russia has decided to lower the key rate by 25 basis points to 7.5%

MOSCOW, February 9. /TASS/. The Board of Directors of the Bank of Russia at its first meeting this year decided to lower the key rate by 25 basis points to 7.5%, the regulator said in a press release.

The Bank of Russia notes that annual inflation remains at a consistently low level, while inflation expectations are gradually declining.

"Short-term pro-inflationary risks have abated. Therefore the balance of inflationary and economic risks has shifted slightly towards the risks to economic growth. The uncertainty over the situation in global financial markets has increased. This year annual inflation is much less likely to exceed 4%. In this environment the Bank of Russia will continue to reduce the key rate and may complete the transition from moderately tight to neutral monetary policy in 2018," the regulator said.

On the eve of the meeting most of the analysts interviewed by TASS said that the regulator would likely to lower the key rate from to 7.5%. Among the main factors for such a decision they named low inflation, a decrease in devaluation risks amid stabilization of oil prices.

At the same time, a number of experts note that the volatility that recently emerged on global market as well as the growing expectations of tightening monetary policy in the US and the EU, may force the Bank of Russia to take a more cautious approach to changing rates in the future.

The Board of Directors of the Bank of Russia will hold its next meeting on the key rate on March 23, 2018.