Bank of Russia does not rule cutting key rate twice until 2020 – regulator’s Chief

TASS Russian News Agency | Jun 14, 2019 at 1:51 PM

MOSCOW, June 14. /TASS/. The Bank of Russia does not rule out cutting its key rate twice until the end of 2019, head of the Bank of Russia Elvira Nabiullina told reporters at a press conference.

"We have really given a signal that a transition to a neutral rate is possible (the range of the neutral rate is kept at 6-7% - TASS) until mid-2020. This means that the key rate may be cut one more time or even twice before the end of the year," she said.

She added that it is possible, "if the situation develops in accordance with the baseline scenario" and "if there are no negative surprises."

On Friday, Bank of Russia cut its key rate by 25 bp to 7.5% per annum, for the first time since March 2018, the regulator said in a press release following the board of directors meeting.

The regulator said it admits the possibility of further key rate reduction at one of the upcoming Board of Directors’ meetings and a transition to neutral monetary policy until mid-2020.

"In its key rate decision-making, the Bank of Russia will take into account actual and expected inflation dynamics relative to the target and economic developments over the forecast horizon, as well as risks posed by domestic and external conditions and the reaction of financial markets," according to the regulator’s press release.