Nabiullina allowed the key rate to be reduced in the second half of 2024

The head of the Central Bank, Elvira Nabiullina, said that the regulator allows for a gradual reduction of the key rate in the second half of 2024. The decision will depend, among other things, on inflation risks, she clarified.

“As for the space for reducing the rate, it really exists, but, in our opinion, it will happen gradually and smoothly. We discussed with our colleagues when the first reduction in the key rate might begin, the range of opinions was quite wide, but the majority believes that this will most likely happen in the second half of this year,” Ms. Nabiullina said at a press conference (quoted by TASS).

According to the head of the Central Bank, inflation will slow down gradually after demand overheats, so the key rate will be lowered sequentially. “The size of the steps will be determined by the data that we receive on the rate of slowdown in inflation, on inflation expectations, on inflation risks,” said Elvira Nabiullina.

Following the meeting of the Board of Directors of the Central Bank today, February 16, the regulator saved key rate at 16%. Before that, it was raised five times in a row – a total of 850 basis points. According to the regulator’s forecast, taking into account the current monetary policy, inflation in 2024 will drop to 4–4.5%. The price increase in December-January of this year was 6.6%. Annual inflation remains close to the levels of December last year and is estimated at 7.4% as of February 12

About how the high key rate affected lending – in the publication “Kommersant” “Cash in small change”.

Lusine Balasyan