The government denied publications about pressure on the Central Bank

Bloomberg’s information about government pressure on the Bank of Russia to lower the key rate is not true, Prime Minister Mikhail Mishustin’s press secretary Boris Belyakov told Vedomosti. The Cabinet of Ministers and the Central Bank are in constant contact, including in the development of measures to support the economy in the face of sanctions and act within their powers and functions, he said.

“The publication of such information is always sensitive for businesses and citizens, and such stuffing is speculation in order to influence the development of the situation in the economy,” Mishustin’s representative emphasized.

Vedomosti sent a request to the Central Bank.

Bloomberg reported on Feb. 7 that the 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.

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 cut in 2023.

According to the consensus forecast of Vedomosti, the Central Bank at the next meeting will leave the rate unchanged – 7.5%.

The last time the Central Bank changed the rate was in September 2022, lowering it from 8% to 7.5%. In a release following the last meeting last year, the regulator indicated that it would make further decisions on the rate, taking into account the actual and expected inflation dynamics relative to the target, the process of economic restructuring, as well as assessing the risks from internal and external conditions and the reaction of financial markets to them .

According to the latest data from Rosstat, from January 24 to January 30, inflation accelerated to 0.21% from 0.14% a week earlier. Since the beginning of January, prices have risen by 0.74%. In annual terms, on January 30, inflation was 11.5% after 11.49% the previous week, follows from the review of the Ministry of Economic Development “On the current price situation.” The Central Bank, in turn, recorded a decrease in inflation expectations of Russians for the next 12 months in January to 11.6% from 12.1% in December

As Vedomosti wrote, on January 17, at a meeting with the president, members of the government and the chairman of the Central Bank discussed the problem of stagnation in demand in the economy. Economic Development Minister Maxim Reshetnikov made a report on this issue at a meeting with Vladimir Putin.

The position presented by the Ministry of Economic Development expressed concern about the stagnation of demand and low inflation illustrating this problem. Price increases since September last year have been well below 3%, while live cash register data show a decline in demand in real terms year-on-year.

The key task for 2023 was the restoration of demand, the main indicator of which in the current situation is inflation, Vedomosti sources reported. In other words, according to the Ministry of Economy, it is necessary to achieve the inflation target (in the macro forecast, the agency expects prices to rise at the level of 5.5% this year, the target range of the Central Bank is 5-7%. – Vedomosti).

At the meeting, it was discussed that deposits and balances in bank accounts are growing faster than lending. Moreover, although banks recorded a near-record loss in the first half of the year, over the remaining half of 2022 they were able to reduce it and reach a profit of more than 200 billion rubles. at the end of the year.