Nabiullina did not rule out the possibility of reducing the key rate in 2023
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The opportunity to reduce the key rate of the Central Bank this year has decreased, but still remains, should from the statement of the head of the Bank of Russia Elvira Nabiullina.
“In our updated forecast for this and next year, the ranges for the average key rate are increased by half a percentage point, to 7.0-9.0% per annum for 2023 and 6.5-7.5% per annum for 2024. This does not exclude the possibility of a rate cut this year, but its probability and scale have decreased,” the head of the Central Bank said.
According to Nabiullina, the likelihood has increased that some rate hike may be needed to bring inflation in line with the 4% target in 2024.
On February 10, the Board of Directors of the Bank of Russia decided to keep the key rate again – as in September 2022, it is 7.5% per annum. The inflation rate last year was 11.9%, while the GDP decline was 2.1%. As explained in the press service of the department, inflationary expectations of business and the population for this year have decreased, but remain at an elevated level. The report also says that the dynamics of economic activity is better than the forecast, which the bank posted in October.
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