Moscow. January 29. The Board of Directors of the Bank of Russia on Friday will consider the issues of monetary policy, analysts expect the key rate at 11% in conditions of instability on financial and the currency market and elevated inflation risks.
A pleasant surprise, as in January last year, when the Central Bank unexpectedly market cut its benchmark rate by two percentage points, to not wait. Beginning of 2016, was marked with a sharp devaluation of the ruble, is bearing the risks for inflation – anchor monetary policy by the Bank of Russia.
Since the final in 2015 the meeting of the Central Bank debate about the possibility of keeping rates unchanged shifted to its increase risk amid weakening of the ruble, following falling oil prices. However, the possibility of tightening the OST analysts regarded as very low and unanimously predict saving rates this week.
“The main arguments in favor of this solution (saving rates) may be instability in the financial markets and the increased risk of inflation due to the devaluation of the ruble. We currently believe that the controller can return to the monetary policy easing no earlier than the second half,” – said in the review of Gazprombank.
According to Gazprombank, the Central Bank in terms of the cooling of the economy is unlikely to raise its key interest rate, also has a wide range of other tools to stabilize the situation.
About this signalled and the Bank of Russia as saying that he sees no risks to financial stability of Russia, but if necessary, ready to use their Arsenal of tools to stabilize the situation on the market.
“We monitor the indicators and implemented, and the expected volatility. Strive to prevent their excessive growth, based on fundamental factors and those associated with the situation with monetary liquidity and other disabilities in the work market. And we have a whole set of tools in order to be proactive and to avert threats to financial stability,” said January 22, the Governor of the Bank of Russia Elvira Nabiullina, which a day earlier had decided not to go to the forum in Davos.
In December of last year, when the situation on the oil and currency markets was much more stable, the Central Bank has signaled that it may resume lowering the rates on one of its next three meetings of the Board of Directors as the slowing of inflation in line with forecast and subject to the weakening of inflationary risks. In a January press release, according to analysts, the Bank of Russia, most likely, will refuse from this phrase and will take a hawkish attitude.
“Monthly data for December show that the recession in the economy may be deeper, while the latest statistics on inflation are encouraging. However, we believe that the regulator is unlikely to resume its easing of monetary policy at the price of Brent oil below $30 per barrel and volatile financial markets. However, we would not be surprised if the Central Bank will “hawk” signal on Friday to remind the market that this tool is at his disposal,” say analysts at Royal Bank of Scotland, who also expect the saving rate.
Inflation in the Russian Federation from 19 to 25 January was 0.2%, since the beginning of the year prices rose by 0.7%. Due to the high base of last year, the consumer price index in annual terms slowed to 10.2 a 10.3% from 11.8% a week earlier.
While the Central Bank sees inflation rising in 2016 in the baseline scenario in the range of 5.5 to 6.5% when the price of oil at $50 per barrel and inflation at 7% in risky scenarios at the price of $35 per barrel. However, the regulator in January noted that the probability of a risk scenario increased. Updated macroeconomic forecast of the Central Bank promises to deliver in March.