19 May 2020 17:15

CBR has opportunity to conduct monetary easing, potential for new rate cut exists - Nabiullina

MOSCOW. May 19 (Interfax) - The Central Bank of Russia (CBR) has the opportunity to conduct monetary easing, and provided the situation unfolds in line with expectations and forecasts, the potential exists for a new key rate cut, CBR Governor Elvira Nabiullina said during a meeting concerned with implementation of measures aimed at supporting the economy and the social sphere on Tuesday.

Nabiullina noted positive trends in inflation and inflationary expectations. "All of this gives us the opportunity to conduct monetary easing. We have already reduced the key rate in the past, and if the situation unfolds in line with our expectations, our forecast, we have the potential for further reduction of the key rate in order to maintain demand in the economy, particularly in the period when restrictive measures are being eased gradually," Nabiullina said.

The CBR chief recalled that in March and April, there was an increase in prices for certain types of goods due to the dynamics of the exchange rate and increased demand for some products, primarily non-perishable goods. "However, in May we see that in late April - early May, price increases are generally on the decline. This indicates a weakening of inflationary factors. And we can see that so-called disinflationary factors will dominate in the near future," Nabiullina said.

"Inflation has now stabilized somewhere around 3.1% in annual terms. And what's important, after some growth in inflationary expectations, they are now also beginning to decline," she said.