29 Jun 2022 13:57

Central Bank still sees room for rate reduction, but situation changeable - Nabiullina

MOSCOW. June 29 (Interfax) - The Central Bank of Russia still sees room for key rate reduction, but the situation is changeable and policy decisions are affecting the economy with lags.

"We see opportunities for further reduction of the key rate, but of course the situation here is very changeable. We also need to understand that we have lags. The way we lowered the rate is beginning to affect rates in the economy with a lag of two to three months. If we change the rate quickly, then these lags are smaller, when we do it more smoothly, of course, there are these lags. We will need to evaluate credit conditions, conditions for deposits, taking into account these lags," Central Bank Governor Elvira Nabiullina said at the Russian Union Industrialists and Entrepreneurs congress.

The Central Bank's board of directors on June 10 decided to lower the key rate 150 basis points to 9.5% per annum. That followed three bigger rate cuts of 300 bps - to 11% on May 26, to 14% on April 29 and to 17% on April 8. The rate was hiked from 9.5% to 20% in February in response to inflation and devaluation risks and it remained at that level in March.