The Department of the Central Bank: the fed can raise the rate one or two times until the end of 2016

The Department of the Central Bank: the fed can raise the rate one or two times until the end of 2016


MOSCOW, February 3. The U.S. Federal reserve to raise rates 1-2 times before the end of 2016, the ECB, in contrast, will probably lower her in March that could pave the way for the strengthening of the ruble. This assessment is contained in the Bulletin of the Department of studies and forecasting of the Bank of Russia.

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“Current market indicators (such as futures on the key rate of the fed) include only one or two of improvement before the end of 2016”, – stated in the report, which also noted that while these risks are not essential, and the policy easing of the ECB in March 2016 seems very likely. “This decision will definitely support financial markets, including the Russian ruble”, – predicts the Department.

As also noted in the report, the reaction of the Russian market to the recent decision by the Bank of Russia on preservation of the key rate at 11 percent “is neutral – positive.” “The decision coincided with the consensus. Market participants before the announcement of the decision of the Board of Directors of the Bank adjusted its expectations for monetary policy direction”, – informs the Department of the Central Bank.

Background

The Federal reserve system of the USA which serves as the Central Bank of the country, on 16 December last year raised the benchmark interest rate by 25 b.p. to 0.25-0.5% 0-0,25% per annum. Basic discount rate the fed last increased in June 2006 From December 2008 to date it has remained almost at zero – 0-0,25%. The growth rate is putting pressure on the currencies of developing countries and increases the volatility in the currency market of the Russian Federation.