Russian Central Bank announces extraordinary meeting on key rate amid ruble strengthening

MOSCOW. May 25 (Interfax) - The Central Bank of Russia (CBR) has decided to hold an extraordinary meeting of the regulator's board of directors on Thursday, May 26, regarding the key rate, the CBR said in a statement.

The CBR will issue a press release following the meeting at 10:30 Moscow time.

The CBR has not commented on the reasons prompting the extraordinary meeting, and there are no signals. However, just prior to the announcement, the CBR had issued commentary on inflation expectations, which the regulator usually publishes in the afternoon. The CBR noted that inflation expectations of households and enterprises have declined in May, which the regulator said "is a necessary prerequisite for reducing sustained inflationary pressure, and it confirms that there is room for cutting the key rate."

At the beginning of this week, Central Bank Deputy Governor Alexei Zabotkin repeated the signal that there was room for cutting the key rate.

"The current rate of price growth has indeed been decelerating substantially, slowing faster than what occurred in 2015; and based on this, we see room for a further cut in the key rate during this year," Zabotkin said.

The ruble has been strengthening significantly following its collapse in February amid the introduction of foreign exchange controls and the mandatory selling of forex earnings by exporters.