Central Bank of Russia holds key rate at 6.0%, as expected
MOSCOW. March 20 (Interfax) - The Central Bank of Russia's board of directors decided at its meeting on March 20 to hold the key rate at 6.0% per annum, the regulator said in a commentary to the decision.
"Moving forward, in its key rate decision-making the Bank of Russia will take into account actual and expected inflation dynamics relative to the target and economic developments over the forecast horizon, as well as risks posed by domestic and external conditions and the reaction of financial markets," it said.
"In February - March, the situation has been developing with a significant deviation from the Bank of Russia's forecast under the baseline scenario. This is related to changes in external conditions: the spread of the coronavirus epidemic and a sharp drop in oil prices. The ruble's depreciation is a temporary proinflationary factor. It might prompt annual inflation to exceed the target level this year. However, the dynamics of domestic and external demand will exert a meaningful constraining influence on inflation on the back of a pronounced slowdown of global economic growth and increased uncertainty. The package of measures adopted by the Government and the Bank of Russia ensures financial stability and will support the economy," the CBR said.
"All these factors were taken into account when making the key rate decision. Given the current monetary policy stance, annual inflation will return to 4% in 2021," the CBR said.