Bloomberg: the government is trying to reduce the key rate from the Bank of Russia

The Russian government is putting pressure on the Central Bank, inclining to more optimistic economic forecasts, as well as urging the regulator to signal to the market that it is ready to ease its monetary policy. This is reported Bloomberg with reference to sources familiar with the discussion of the issue.

As the agency notes, ahead of the CBR meeting scheduled for February 10, Russian government officials expect a clearer signal from the regulator that the key rate may be reduced in 2023.

Meanwhile, the head of the Central Bank Elvira Nabiullina and her colleagues, Bloomberg notes, do not intend to cut the rate due to the risks of high inflation. Instead, the specialists plan to emphasize that under the current conditions, the chances of lowering the key rate are low, the agency notes.

The Central Bank believes that the slowdown in inflation may be temporary, and it is impossible to make accurate forecasts in an unstable situation. According to Rosstat, inflation in 2022 was 11.94%. Analysts of the Central Bank expect that in 2023 it will be 6%. At the same time, the government’s key indicator is 4%.

At the same time, employees of the Bank of Russia, and Mrs. Nabiullina in particular, agree to improve economic forecasts. According to Bloomberg sources, the government positively assesses this step, since in this case the regulator will seek to ease its monetary policy.

To date, the key rate is set at 7.5%. The Central Bank has already kept this indicator three times. According to the forecast of the Central Bank, in 2023 the average key rate will be in the range of 6.5-8.5%, in 2024 – 6-7%, in 2025 – 5.6%. Regulator allowed changes in the key rate forecast based on the results of taking into account several factors, including the situation in the oil and gas markets, the final budget and sanctions restrictions.

Lusine Balasyan