Central Bank lowered its key interest rate from 11.5 to 11% and forecasts the growth of the ruble – commander

Bank of Russia allows the reduction of the key rate at 0.5%, and possibly a percentage at the next board meeting. This turn is only possible at the lowest possible inflation in weekly terms – 0.1%. This information came PPE press service of Ministry of Economic Development.

Following the meeting of the Board of Directors on June 15 the Bank of Russia announced reduction from August 3 key rate by 0.5 percentage points, to 11% . The key rate – is the rate of Bank of Russia loans on securities (repo) for a period of seven days. “The Board of Directors decided to reduce the key rate c 11,50% to 11,00% per annum, given that the balance of risks is still biased towards a significant cooling of the economy, despite some increase in inflationary risks,” – said in a statement the Central Bank.

The dynamics of the main macroeconomic indicators point to a further cooling of economic activity. According to the Bank of Russia, the decline in GDP in the second quarter to the same period last year was more significant than the first. “Although structural factors continue to have a dampening effect on economic growth, decline in output currently has including the cyclical nature. This is evidenced by the low level of consumer and business confidence, reduction in capacity utilization and the labor force “, – stated in the decision of the regulator.

The decision of the Bank of Russia coincided with the consensus forecast of economists compiled by RBC on Thursday, on 30 July. The consensus forecast of economists surveyed by RBC predicts that the regulator will reduce the rate to 11%.

The chief economist for Russia and CIS, “Renaissance Capital” Oleg Kuzmin said that the decision of the Central Bank to lower the rate was expected. “The reason for this was the favorable outlook for inflation in 2015-2016. The Bank of Russia does not expect growth in consumer demand, and this creates a good environment disinflation “- he explains. The expert also recalled that the Ministry of Finance published in early July forecast indexation of pensions and salaries to state employees – it will be very moderate, which also reduces inflationary expectations.

Experts predict a decrease of the key rate in the past, but some of them originally believed that rate will lower than 0.5 and 1 percentage point. Analysts attributed Sberbank CIB: this is due to the fact that this week the ruble plummeted. “Probably, the Central Bank chose to be cautious and not to provoke a further decline of the ruble,” – they point out. On Monday, July 27 the price of Russian Urals oil on the spot market fell below $ 52 per barrel, while North Sea Brent – to $ 53.20 per barrel. For oil and ruble assets followed: the Russian currency depreciated against the dollar and euro, respectively, by 85 kopecks. (Up to 59.35 rubles ./$ ) and 1.7 rubles. (Up to 65.94 rubles. / €), updating the four-month low.

These exchanges show Moscow: the dollar and the euro gained 30 kopecks. immediately after the decision of the Central Bank to lower its key rate. “The currency has made a small jump: the dollar at 13:30 jumped to 60.60 rubles ./$ euro – up to 66.60 rubles. Then the situation stabilized, and then again a wave of up to 13:40 currency traded at 66.40 rubles. / € and 60.50 rubles ./$ . The market is volatile, while many expect the weakening of the ruble and buy up the currency “, – says head of the analytical department of the IR” Region “Valery Weisberg.

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