The Central Bank lowered the key rate to 7.5%

The Board of Directors of the Bank of Russia made the sixth decision to cut the key rate from 8% to 7.5% (by 50 basis points). The reasons for the decrease in the indicator, as explained in the regulator, were the ongoing decline in inflation and the revival of domestic demand. Last time the main credit instrument corrected Central Bank July 22.

“This is due both to the influence of a set of one-time factors and to restrained consumer demand. The dynamics of business activity is developing better than the Bank of Russia expected in July, ”explains in a press release on site regulator. Representatives of the Central Bank explain that inflation expectations of the population and price expectations of enterprises are still at an elevated level.

According to the Bank of Russia, by the end of 2022 annual inflation will drop to 11–13%, in 2023 to 5–7%, and in 2024 it will return to 4%. The regulator also fixes the easing of monetary conditions.

“The negative impact on economic activity is exerted by both supply and demand factors. According to survey data, a significant proportion of enterprises are still experiencing difficulties in production and logistics,” the Central Bank said in a statement.

After the start of the military operation in Ukraine and the imposition of Western economic sanctions on February 28, the Bank of Russia raised key rate from 9.5% to 20%. On April 8, the Central Bank began a gradual decrease in the indicator – from 20% to 17%, on April 29 – from 17% to 14%, on May 26 – from 14% to 11%, on June 10 – from 11% to 9.5%, on July 22 — from 9.5% to 8%.

About the last rate cut – in the material “Kommersant” “The Central Bank stepped over the analysts”.

Andrey Sapozhnikov