13 Jun 2024 15:52

Russian Central Bank may consider same rate options in July as in June, but a lot can change until then - CBR department head

MURMANSK. June 13 (Interfax) - The Russian Central Bank's Board of Directors may consider the same options regarding decisions on the key rate it did in June at its meeting in July, but a lot can change before the next round, Kirill Tremasov, director of the Central Bank's monetary policy department said.

"We will have complete statistics on inflation for both May and June by the July meeting, so we will have more data with which to make an informed decision. I think that the proposals that were made in June, at the June board of directors, will be on the table in the July round as well. Objectively speaking, the July round is still far away, so a lot can change," Tremasov told reporters in Murmansk.

He said that the CBR Board of Directors considered the possibility of raising the rate 100 basis points (bps) in June to 17%, as well as 200 bps to 18%, but decided in the end to keep the rate at 16%.

"The Board of Directors has decided for now to see how the situation develops, including how much inflation is accelerating, which we can see in the second quarter, how stable it is, and how severe the Russian economy's state of overheating actually is," Tremasov said.

The Central Bank inflation forecast for April sees it at the level of 4.3-4.8% for 2024.

"Inflation growth is now moving closer to the upper limit, and is actually slightly exceeding it. We will update the forecast based on the results of the July meeting," Tremasov said.

It will be possible to talk about space for reducing the rate after the question of space for raising it goes away, the head of the department said.

"We are now considering the possibility of raising the key rate. This issue was discussed at the June meeting. I think it will be discussed at the July meeting. Moreover, the signal that we gave sounds like "we admit the possibility of a rate hike in July." First Instead of talking about space for reduction, we probably need to deal with space for increase," he said.

The next Central Bank Board of Directors meeting on the rate will be held on July 26. It will be a pivotal meeting in that the press release will be accompanied by the publication of a medium-term forecast. A summary of the rate discussion and commentary on the forecast will be released on August 7.