MOSCOW, October 23. /TASS/. The space for key rate reduction remains for the next year but it has become smaller, Central Bank chief Elvira Nabiullina said at the press conference after the regulator’s Board meeting.
TASS collected key takeaways from the statements of the Governor of the Bank of Russia.
The Board of Directors of the Bank of Russia substantively discussed only the key rate level keeping at the meeting today.
The room for key rate reduction remains for the next year but it "has become smaller."
"The neutral key rate will be higher if the budget deficit is persistently high."
The Bank of Russia does not decide on the key rate mechanically on the basis of one or several models.
Monetary conditions
A longer period of keeping moderately tough monetary conditions will be required for the sustainable return of inflation to 4% i the next year.
"No significant changes in monetary conditions occurred in real terms," Nabiullina said.
Inflation
Inflation expectations of households "are close to their maximal values over the two years" in recent months.
The Bank of Russia forecasts the return of current price growth rates to 4% during the first six months of 2027.
The regulator assumes that the budget will have a disinflationary effect in the forecast period.
The Central Bank sees inertia in inflation expectations of Russian population is much higher than expected earlier.
The Bank of Russia is very concerned of high inflation expectations.
All the factors that could influence inflation by the end of this year have already materialized.
Restoration of withdrawn capacities
The rate of restoration of withdrawn capacities is largely a factor of uncertainty. The Bank of Russia assesses that the potential will recover gradually.
The economy will restore withdrawn capacities in 2027 but it is difficult to accurately forecast at present.
National economy and ruble rate
The Russian economy should gradually move to balanced growth rates.
Investments continue recovering in the national economy.
Contraction of supply and acceleration of demand is "the most unpleasant" for the Russian economy.
The rise in export revenues linked to the commodity price hike backed the ruble in recent months.