9 Jun 2023 16:40

Central Bank considered hiking rate on Friday - Nabiullina

MOSCOW. June 9 (Interfax) - The Central Bank of Russia's board of directors looked in detail at the possibility of hiking the key rate at its Friday meeting, but decided to keep it unchanged while sending a firmer signal to the market, Central Bank Governor Elvira Nabiullina said.

"Yes, the option increasing the rate was considered in detail, but we reached a consensus to hold the rate, but to firm the signal. The probability of raising the rate has increased," she said at a press conference on Friday.

She said rate increments of between 25 and 75 basis points were considered. "Various proposals were aired, between 25 and 75 bps," she said.

"As for any change in rate neutrality, as we have already said, we confirm that we will be revising our assessment of the neutral range, but this will take place in the monetary policy guidelines. This process will take place in the summer-autumn, but, most likely, any adjustment will be upwards in our estimate of the neutral rate range," she said.

The Central Bank currently assesses long-term rate neutrality at 1-2% in real terms, but in nominal terms an inflation target of 4% translates into a neutral rate of 5-6%.