Nabiullina warned about the imminent end of the cycle of rate cuts

The Bank of Russia is concerned about the increase in inflationary expectations of Russians against the backdrop of lower prices, said Central Bank Chairman Elvira Nabiullina. She noted that inflation expectations are not yet transformed into growth in consumer demand, but this situation may change. she also warned that the Bank of Russia could soon complete the cycle of rate cuts.

“We are concerned that inflation expectations of the population remain at elevated levels, and even rose slightly, despite several months of decline in the overall price level,” Ms. Nabiullina said during today’s press conference with the regulator (its broadcast is available on YouTube). Earlier, according to the chairman of the Central Bank, such a phenomenon has never been observed against the backdrop of a slowdown in inflation.

Elvira Nabiullina stressed that the next step of the Central Bank could be either a pause in the adjustment of the key rate, or its increase. “The cycle of rate cuts is likely close to completion,” she warned.

Today the Central Bank lowered key rate from 8% to 7.5%. The last time the regulator adjusted the credit ratio on July 22, reducing it from 9.5% to 8%. “We positively assess the reduction of the key rate of the Bank of Russia… Together with comprehensive government measures, it will provide additional support to the economy, give an incentive to lending and consumer demand,” Ms. Nabiullina described the decision of the Central Bank.

About the rate cut – in the material “Kommersant” “The Central Bank has slowed down”.

Andrey Sapozhnikov