It clarifies the Agency, among 38 of the financial institutions interviewed, only nine had predicted that the meeting of the Bank of Russia on Friday of the key interest rate will be reduced.
“Now they begin to doubt their own predictions,” — says the Agency. “The weaker the ruble, the less the probability of lowering rates. A rate cut now, paradoxically, lower than last week, when I did the forecast”, — said the Agency strategist at Rabobank in London Peter Matis. However, it retains the forecast reduction in borrowing costs by 50 basis points.
According to the chief economist for Russia at Citigroup Inc. in Moscow Ivan Chakarov, the head of the Bank of Russia Elvira Nabiullina will have to take into consideration the impact of depreciation on inflation, which is already beginning to accelerate. “Therefore, the Central Bank may suspend the newly launched cycle of easing,” he said.
Russia’s President Vladimir Putin drew attention to the risks of excessive strengthening of the ruble on July 19 during the meeting with Prime Minister Dmitry Medvedev. “The ruble strengthened, despite the price volatility in commodity markets, and in this regard we need to think about how and what we will do in the near future in connection with these factors,” he said then.
After the announcement, the ruble fell for six straight trading sessions, down from 63 to 66 rubles per dollar.
July 26, the analyst of Gazprombank Dmitry Dolgin in his review, he predicted that when the price of oil at $45-50 per barrel in the second half of this year, the national currency should gradually return to the values of 70-75 rubles per dollar.
Meeting of the Central Bank, which must be decided on a rate, will be held on July 29. At the previous meeting on 10 June the key rate was lowered for the first time since Aug 2015 — from 11% to 10.5%. The head of the regulator Elvira Nabiullina in interview to the newspaper “Vedomosti”, published on 29 Jun, said that to say “about the beginning of the cycle of decline in interest rates is premature. “We can take a break, because we need to be sure that no situation will lead to the fact that we are seriously behind our goal of 4% by the end of 2017”, — she said then.