The Russian government is pressing for a softer monetary stance from the Central Bank and for more positive projections about the economy. Bloomberg reports, citing people familiar with the discussions, that this push is gaining attention within policy circles.
In the lead up to the regulatory board’s February 10, 2023 meeting, officials within the government reportedly anticipate a clearer indication from the Central Bank that a rate cut could be on the table during the year. Yet Elvira Nabiullina, who heads the Central Bank, has shown reluctance to lower the rate amid concerns that easing policy might rekindle inflationary pressures.
The publication adds that the intention behind a potential rate reduction is to support the economy, while acknowledging that the impact could be temporary and inflation may rebound after a period of stabilization. It is noted that, given the current volatility and instability in the broader environment, precise forecasts remain challenging.
Bloomberg’s sources say that the Central Bank of Russia has agreed to refine its economic outlook, a move that the government reportedly views favorably. Put plainly, this signals a possible softening of policy in the future as forecasts become more favorable or at least less pessimistic than before.
According to Bloomberg and a consensus drawn from analysts on February 6, the expectation among many observers is that the central rate will stay at 7.5 percent when the Bank’s board meets on February 10. Eight economists surveyed by Bloomberg share the view that the rate will be maintained at 7.5 percent for the near term.