The regulator will begin easing monetary policy as inflation falls to a sustained 7% level. This forecast was given DEA News Former Russian Finance Minister and economist Mikhail Zadornov.
“Interest will fall. But when inflation stabilizes at around 7 percent, when the slowdown is stable and people’s inflation expectations will also start to fall,” Zadornov said.
Let’s recall that at the July meeting of the Central Bank of the Russian Federation, the interest rate was raised from 16% to 18% per annum due to the acceleration of inflation. The regulator also signaled a possible rate hike at the upcoming meetings.
According to the Central Bank of Russia’s forecast, no reduction in the key interest rate is expected until the end of 2024. Moreover, it is allowed to keep it at the current level and increase it further.
The Central Bank foresees a possible easing of monetary policy for 2025. The average level of the key interest rate next year is expected to be 14-16%. At the same time, according to the Central Bank, inflation by the end of 2024 will be 8% and 4% by the end of 2025.
Previously, the Ministry of Finance evaluated Russia’s budget deficit.