Central Bank of Russia again lowers key rate, by 50 bps to 16.5% per annum
MOSCOW. Oct 24 (Interfax) - The Central Bank of Russia's board of directors has decided to lower the key rate for the fourth time in a row, on this occassion by 50 basis points (bps) to 16.5% per annum.
The majority of analysts believed the rate would remain unchanged, while a number of economists had allowed for its reduction by a step of 50 bps or 100 bps.
"Underlying measures of current price growth have not changed significantly and remain above 4% in annualised terms. The economy continues to return to a balanced growth path. Lending growth has accelerated in recent months. Inflation expectations remain high," said a CBR press release issued following the meeting of its board of directors on Friday.
The CBR will maintain the tightness of monetary conditions necessary to return inflation to the target, the regulator said. Further decisions on the key rate will be made depending on the sustainability of the slowdown in inflation and the dynamics of inflation expectations, it said.
At the board's previous meeting on September 12, the rate was lowered by 100 bps. Prior to that, on July 25, the board of directors decided to lower it by 200 bps, from 20% per annum to 18% per annum. On June 6, it decided to lower the rate for the first time in more than two and a half years, by 100 bps from 21% per annum.
The Central Bank kept the rate at 21% per annum for four consecutive meetings until June, after raising it on October 25 last year by 200 bps from 19%. At the meeting on December 20, 2024, a decision was made to keep the rate at this level, although the majority of analysts had expected an increase. The rate remained at the same level on February 14, March 21 and April 25.
The next meeting of the CBR's board of directors on the key rate will be held on December 19.